Question 54

# The Maximum Retail Price (MRP) of a product is 55% above its manufacturing cost. The product is sold through a retailer, who earns 23% profit on his purchase price. What is the profit percentage (expressed in nearest integer) for the manufacturer who sells his product to the retailer? The retailer gives 10% discount on MRP.

Solution

Let Manufacturing Cost of the product = $$Rs. 100$$

=> Maximum Retail Price(MRP) = $$100 + \frac{55}{100} \times 100 = Rs. 155$$

Retailer gives 10% discount on MRP

=> Retailer's selling price = $$155 - \frac{10}{100} \times 155 = Rs. 139.5$$

It is given that the retailer earned 23% profit on his purchase price, say $$Rs. x$$

=> $$\frac{123 x}{100} = 139.5$$

=> $$x = \frac{13950}{123} = 113.41$$

Now, the purchase price of retailer = $$x$$ = selling price of Manufacturer

$$\therefore$$ Profit earned by Manufacturer = $$113.41 - 100 = 13.41$$

$$\approx 13 \%$$

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