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    Question

    Find the cost of manufacturing each article if a

    manufacturer estimates that on inspection 13% of the articles he produces will be rejected. He accepts an order to supply 25,000 articles at Rs. 6 each. He estimates the profit on his outlay including the manufacturing of rejected articles, to be 20%.
    A Rs 5.5 Correct Answer Incorrect Answer
    B Rs 5.3 Correct Answer Incorrect Answer
    C Rs 5 Correct Answer Incorrect Answer
    D Rs 4.35 Correct Answer Incorrect Answer
    E None of these Correct Answer Incorrect Answer

    Solution

    If 100 articles are manufactured then 13 will be rejected
    Total selling price of 87 articles = 87 × 6 = 522
    Total cost price = (522 x 100)/120 = 435
    cost of manufacturing per article = 435/100 = Rs 4.35

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