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      Question

      Find the cost of manufacturing each article if a

      manufacturer estimates that on inspection 18% of the articles he produces will be rejected. He accepts an order to supply 55,000 articles at Rs. 6.5 each. He estimates the profit on his outlay including the manufacturing of rejected articles to be 30%.
      A Rs 8.30 Correct Answer Incorrect Answer
      B Rs 7.30 Correct Answer Incorrect Answer
      C Rs 4.10 Correct Answer Incorrect Answer
      D Rs 4.30 Correct Answer Incorrect Answer
      E None of these Correct Answer Incorrect Answer

      Solution

      If 100 articles are manufactured then 18 will be rejected
      Total selling price of 82 articles = 82 × 6.5 = 533
      Total cost price = (533 x 100)/130 = 410
      cost of manufacturing per article = 410/100 = Rs 4.10

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