Question

The manufacturer A of a certain item sells it to a wholesaler at a profit of $20\%$ on his manufacturing cost. The wholesaler sells it to a retailer at a profit of $25\%$ and the retailer sells it to a consumer at a profit of $20\%$. The price paid by the consumer over and above manufacturing cost Will be

• A. $65\%$
• B. $80\%$
• C. $85\%$
• D. $90\%$

Answer 1

The correct option is B $80\%$

Let the manufacturing cost be Rs. x. Then
wholesaler's cost price $=x+\frac{20}{100}x=Rs.\frac{6x}{5}$
Retailer's cost price $=\frac{6x}{5}+\frac{25}{100}.\frac{6x}{5}=Rs.\frac{3x}{2}$
Finally, consumer's purchasing price
$=\frac{3x}{2}+\frac{20}{100}\times \frac{3x}{2}=Rs.\frac{9x}{5}$
Thus on the manufacturing cost of Rs. x, the consumer pays $(\frac{9x}{5}-x)=Rs.\frac{4x}{5}$ over and above.
$\therefore$ % price paid by consumer over and above manufacturing cost $=\frac{4x}{5}.\frac{1}{x}.100=80$