The MRP of a article is 60% above its manufacturing cost. The article is sold through a retailer, who earns 19% profit on his purchase price. What is the approx. profit percentage for the manufacturer who sells his article to the retailer? The retailer gives 15% discount on MRP.
Explanation:
The manufacturer sells the product to retailer, and then retailer sells to the customer. Assume manufacturing cost = 100 and manufacturer profit = x
As Maximum Retail Price (MRP) of a product is 60% above its manufacturing cost,
MRP = 160% of 100 = 160
The retailer gives 15% discount on MRP. So, customer price is 85% of MRP. Buyer Price = 85% of 160 = 136
Manufacturer makes x rupees profit, and then retailer makes 19% profit.
So, 119% of (100 + x) = 136
⇒ 119 (100 + x) = 13600
⇒ (100 + x) = 114.28
⇒ x = 14.28
Hence, Manufacturer profit = 14.2%
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By: Parvesh Mehta