If the manufacturer gains 10%, the wholesaler 15% and the retailer 25% on the sale of a table. What is the cost of the production of a table, if the retail price is Rs. 1265?
Answer & explanation
Correct answer: option 4
The correct answer is Option (4) → Rs. 800
Each seller sells at his own cost plus his gain, so each gain multiplies the price: a gain of 10% multiplies it by 1.10, 15% by 1.15 and 25% by 1.25. The retail price is the cost of production multiplied by all three.
Assuming the cost of production to be \(x\):
The manufacturer sells at \(1.10x\)
The wholesaler sells at \(1.10\times1.15x=1.265x\)
The retailer sells at \(1.265\times1.25x=1.58125x\)
\(1.58125x=1265\), so the cost of production is Rs. 800