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    Question

    Find the cost of manufacturing each article if a

    manufacturer estimates that on inspection 14% of the articles he produces will be rejected. He accepts an order to supply 90,000 articles at Rs. 6.6 each. He estimates the profit on his outlay including the manufacturing of rejected articles to be 20%.
    A Rs 4.73 Correct Answer Incorrect Answer
    B Rs 3 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 14 will be rejected
    Total selling price of 86 articles = 86 × 6.6 = 567.6
    Total cost price = (567.6 x 100)/120 = 473
    cost of manufacturing per article = 473/100 = Rs 4.73

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