Question

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 for the manufacturer who sells his product to the retailer? The retailer gives $10\%$ discount on MRP.

• A. $13.4$
• B. $14$
• C. $17$
• D. $16.4$

Answer 1

Answer: (A)

$13.4$

The manufacturer sells the product to retailer and then retailer sells to the buyer.

Assume manufacturing cost $=100$ and manufacturing profit $=x\%$.

As maximum retail price (MRP) of a product is $55\%$ above its manufacturing cost.

MRP $=100(1+0.55)=155$

The retailer gives $10\%$ discount on MRP. So, buyer price is $90\%$ of MRP.

Buyer price $=155\times 0.9$

Manufacturer makes $x\%$ profit and then retailer makes $23\%$ profit.

So, $100(1+x)\times (1+0.23)=155\times 0.9$

$100+100x=113.41$

Therefore, $x=0.134$

Hence, manufacturer profit $=13.4\%$