Question

A company wishes to earn a $20\%$ profit margin on selling price. Which % will achieve the required profit margin on cost?

• A. $33\%$
• B. $25\%$
• C. $20\%$
• D. None of these

Answer 1

The correct option is B $25\%$

Let Cost = $Rs.100$ ,Profit margin on Selling Price = $20\%$ and Selling price = $Rs.125$

Now Profit = $125$ x $20/100$

= $Rs.25$

Profit margin on Cost = [Profit/ Cost] x $100$

= $\left[25/100\right]$ x $100$

= $25\%$