Question

A soap manufacturer is capable of selling soap at RS 6.36 per peice after adding the VAT at the rate of 6% still he will make a profit of 20% on the sale .what is his manufacturing cost per soap

Answer 1

let SP before vat - 100
then 6% vat comes to 6
so SP after vat will be 106
here, SP after Vat is 6.36
vat = 6.36 × 6 ÷ 106 = 0.36
profit is 20% on sales after vat
so profit = 6.36 × 20% = 1.272
manufacturing cost = 6.36 - 1.272 - 0.36 = 4.73