Question

The cost of manufacturing a TV set is made up of material costs labour costs and overhead costs These costs are in the ratio $4:3:2$. If materials costs and labour costs rise by $10\%$ and $8\%$ respectively while the overhead costs reduce by $5\%$, what is the percentage increase in the total coast of the TV set ?

• A. $6\%$
• B. $8\%$
• C. $4\%$
• D. $10\%$

Answer 1

The correct option is A $6\%$

Let the cost of the T.V. be $\text{Rs.}x$

Then,
Material costs $=\frac{4x}{9}$

Labour costs $=\frac{3x}{9}$

Overhead costs $=\frac{2x}{9}$

New material costs $=\frac{110}{100}\times \frac{4x}{9}=\frac{44x}{90}$
New labour costs $=\frac{108}{100}\times \frac{3x}{9}=\frac{9x}{25}$
New overhead costs $=\frac{95}{100}\times \frac{2x}{9}=\frac{19x}{90}$

Increase in the cost of T.V. $=(\frac{44x}{90}-\frac{4x}{9})+(\frac{9x}{25}-\frac{3x}{9})+(\frac{19x}{90}-\frac{2x}{9})$
$=\frac{4x}{90}+\frac{2x}{75}-\frac{x}{90}$

$=\frac{20x+12x-5x}{450}$

$=\frac{27x}{450}$

$\therefore \text{Increase in cost}=\frac{\frac{27x}{450}}{x}\times 100\%$

$=\frac{2700}{450}\%$

$=6\%$