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      Question

      Find the cost of manufacturing each article if a

      manufacturer estimates that on inspection 19% of the articles he produces will be rejected. He accepts an order to supply 65,000 articles at Rs. 5 each. He estimates the profit on his outlay including the manufacturing of rejected articles to be 25%.
      A Rs 8.30 Correct Answer Incorrect Answer
      B Rs 3.24 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 19 will be rejected
      Total selling price of 81 articles = 81 × 5 = 405
      Total cost price = (405 x 100)/125 = 324
      cost of manufacturing per article = 324/100 = Rs 3.24

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