Multiple choice

A small and medium enterprise imports two components A and B respectively from Taiwan and China, and assembles them with other components to form a toy. Component A contributes to 10% of the production cost. Component B contributes to 20% of the production cost. Usually, the company sells this toy at 20% above the production cost. Due to increase in the raw materials and labour cost in both the countries, component A became 20% costlier and component B became 40% costlier. Owing to these reasons, the company increased its selling price by 15%. Considering that the cost of other components does not change, what will be the profit percentage, if the toy is sold at the new price?

  1. 15.5%

  2. 25.5%

  3. 35.5%

  4. 40%
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Let Cost = 100. A = 10, B = 20, Others = 70. New A = 12, New B = 28, Others = 70. New Cost = 110. Old Selling Price = 120. New Selling Price = 120 * 1.15 = 138. Profit = 138 - 110 = 28. Profit % = (28/110) * 100 = 25.45%.

AI explanation

Let the initial production cost of the toy be Rs. 100, making the original selling price Rs. 120. The new cost of component A is 20% higher than its original 10% share, adding Rs. 2, and the new cost of component B is 40% higher than its 20% share, adding Rs. 8. The new production cost becomes Rs. 110, and the new selling price increases by 15% from Rs. 120 to Rs. 138. The resulting profit is (138 - 110) divided by 110 and multiplied by 100, yielding a profit percentage of 25.5%.

Keep practicing — related questions