In a manufacturing unit, it was noted that the price of raw material has increased by 25% and the labour cost has gone up from 30% of the cost of raw material to 38% of the cost of the raw material. What percentage of the consumption of raw material be reduced to keep the cost the same as that before the increase ?

24.6%

Let, the cost  price of raw material = 100x

The new cost of price of raw material = 100x + 25% of 100x = 125x

The cost of the labour = 130% of 100x = 130x

The new cost of the labour = 138% of 125x = 172.5x

The consumption should be reduced = 172.5x - 130x = 42.5x

The percentage of consumption reduced =

= \(\frac{42.5}{172.5}\)× 100

= 24.63...%

= 24.6% (approx)