Question

A manufacturer makes a profit of 30% on cost after allowing 35% as trade discount. If the discount of production rises by 20%,what should be the reduced rate of trade discount so that the list price remains the same and the percentage profit also remains the same ? ​

Answer 1

Profit percentage = 8%

Step-by-step explanation:

Given: A manufacturer makes a profit of 30% on cost after allowing 35% as trade discount.

Find: If the discount of production rises by 20%, what should be the reduced rate of trade discount so that the list price remains the same and the percentage profit also remains the same

Solution:

Let x denote the cost price of the goods.

Marked price of the goods = x + (35% of x) = x + 0.35x = 1.35x

Selling price = MP - Discount

Discount = 20% of 1.35x = 1.35x × 0.2 =  0.27x

So SP = 1.35x - 0.27x

SP = 1.08x

We find that SP is more than CP by 0.08x. That will be the profit.

Profit percentage = (Profit / CP) x 100

= (0.08x / x) * 100

= 8%