Question 64 (Textile Engineering & Fibre Science)
A firm is selling its product at Rs. 60 per unit. The total cost of production is Rs. 100 and firm is earning total profit of Rs. 500. Later, the total cost increased by 30%. By what percentage the price should be increased to maintained the same profit level.
| (A) | 5 |
| (B) | 10 |
| (C) | 15 |
| (D) | 30 |
Answer / Solution
Let the no. of units=n
Then,total selling price=60 x n
Total cost of production=100 rs
S.P.=60 rs per unit
Profit=C.P-S.P
500=(60 x n)-100
n=10 units
Total S.P=60x 10=600
Here, total cost increased by 30%
C.P.=100+100 x 30%=130 rs
Because profit is same-
Profit=C.P.-S.P.
500=S.P-130
S.P.=630 RS
% increase of selling price=(630-600) x 100/600
=5% (Ans)
Option A is correct.