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Question
The price of raw materials in a company has gone up by 20%. Also, the labour cost has increased to
The price of raw materials in a company has gone up by 20%. Also, the labour cost has increased to
1/4th of the total cost of production which was earlier 1/6th of the total cost of production. By how
much percent should the company reduce its usage of raw materials to keep the total cost of production
same as before?
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Answer
Let price of raw material 100
And new price 120(+20%)
1/6 of 100 =16.66
1/4 of 120= 30
Reduction=(30-16.66/30)*100 =25%
