Multiple choice

Component X (imported from U.S.A) and component Y (imported from Japan) account for 30% and 40% of the production cost of a certain machine. A profit of 25% is to be made, but a discount of 10% is to be offered to customers for promotional reasons. If dollar appreciates by 20% and Japanese yen appreciates by 30%, then what percentage above the original cost price should the product be marked?

  1. 33.3%

  2. 48.50%

  3. 82.33%

  4. 63.88%

  5. 56.68%
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

Let original cost = 100. X = 30, Y = 40, Others = 30. New costs: X = 30 * 1.2 = 36, Y = 40 * 1.3 = 52, Others = 30. Total new cost = 118. To make 25% profit, selling price = 118 * 1.25 = 147.5. Since a 10% discount is offered, MP * 0.9 = 147.5, so MP = 163.88. Percentage above original cost = 63.88%.

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