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The price of raw ingredients has increased by 10% and labour charge also increased from 15% of cost of raw ingredients to 20% of the new cost of raw ingredients. To keep price same by how much percentage there should be reduction in the total cost?

The price of raw ingredients has increased by 10% and labour charge also increased from 15% of cost of raw ingredients to 20% of the new cost of raw ingredients. To keep price same by how much percentage there should be reduction in the total cost? Correct Answer 12.87%

Let the initial price of raw ingredients be 100.

Given,

price of raw ingredients has increased by 10%,

New price of raw ingredients = 100 + 100 × 10/100 = 110

Then,

Initial labour charge = Rs. 15

Initial total cost = 100 + 15 = 115

New labour charge = 110 × 20/100 = 22

Total cost for same usage of raw ingredients = 110 + 22 = 132

Required reduction to keep cost same 

= × 100 = 12.87%

∴ To keep cost same, there is 12.87% reduction in total cost.

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