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      Question

      Find the cost of manufacturing each article if a

      manufacturer estimates that on inspection 12% of the articles he produces will be rejected. He accepts an order to supply 80,000 articles at Rs. 8 each. He estimates the profit on his outlay including the manufacturing of rejected articles to be 10%.
      A Rs 4.73 Correct Answer Incorrect Answer
      B Rs 6.40 Correct Answer Incorrect Answer
      C Rs 4.10 Correct Answer Incorrect Answer
      D Rs 4.30 Correct Answer Incorrect Answer

      Solution

      If 100 articles are manufactured then 12 will be rejected Total selling price of 88 articles = 88 × 8 = 704 Total cost price = (704 × 100)/110 = 640 cost of manufacturing per article = 640/100 = Rs 6.40

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