Multiple choice

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.

  1. $13.4$
  2. $14$
  3. $17$
  4. $16.4$
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A Correct answer
Explanation

Let Cost = 100. MRP = 155. Retailer buys at 155, sells at 155 * 1.23 = 190.65. Retailer gives 10 percent discount on MRP, so selling price = 155 * 0.9 = 139.5. This is inconsistent with the 23 percent profit claim. Assuming the question asks for manufacturer profit: Manufacturer sells to retailer at 155 * 0.9 = 139.5. Profit = 39.5 percent. Given the options, 13.4 percent is likely derived from a different interpretation of the chain.

AI explanation

Assume the manufacturing cost is 100, making the MRP 155. The retailer gives a 10% discount on the MRP, so the retailer's selling price is 155 times 0.9, which equals 139.5. The retailer earns a 23% profit on his purchase price, meaning the manufacturer's selling price to the retailer is 139.5 divided by 1.23, which equals 113.41. The manufacturer's profit percentage is therefore 13.41 over 100, giving 13.4%.

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