A soap manufacturer is capable of selling soaps at 6.36 per piece 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?
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CP = ?
SP = Rs 6.36
VAT = 6%
Profit = 20%
SP = CP + profit amount + VAT
amount = CP + 20% CP + (120% CP) * 6%
6.36 = CP [1+ 0.20 + 1.20 * 6 /100]
CP = 6.36/1.272 = Rs 5.00
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