Question

A bicycle manufacture sell a bicycle at $1308 after adding the VAT at the rate of 9%still he makes a profit of 20% on the sell if each bicycle .What is the manufacturing cost of each bicycle?

Answer 1

Solution :-

Let the cost price of the bicycle including 9 % VAT be $ 'x'

Selling price of each bicycle = $ 1308

So, according to the question

x + (x*20)/100 = 1308
x + x/5 = 1308
(5x + x)/5 = 1308
6x/5 = 1308
6x = 1308*5
6x = 6540
x = 6540/6
x = 1090

So, Cost price including 9 % VAT of the bicycle is $ 1090.

As 9 % VAT is already added in $ 1090.
So, manufacturing cost of each bicycle = (1090*100)/109
= 109000/109
= $ 1000

So, the manufacturing cost of each bicycle is $ 1000

Answer.

Answer 2

Let suppose
The sell price of the bicycle is 'x'
Including 9% VAT
Profit=20%=x*20/100=x/5 which is also included in the sell price
So
x+x/5=$1308
6x/5=$1308
6x=$6540
x=$1090
Which is the cost price including 9% VAT. By extracting VAT we can get manufacturing price.
Manufacturing price=$1090*100/109
Manufacturing price=$1000