Examveda
Examveda

The price of raw materials has gone up by 15%, labor cost has also increased from 25% of the cost of raw material to 30% of the cost of raw material. By how much percentage should there be reduction in the usage of raw materials so as to keep the cost same?

A. 28%

B. 17%

C. 27%

D. 24%

E. Cannot determined

Answer: Option B

Solution(By Examveda Team)

Let the initial cost of raw material be 100. So, initial labor cost was 25 and net cost was 125
Now,
15% increment in raw materials cost and labor cost has gone up to 30% from 25 %
Raw material cost = 115 And
Labor cost = (115 × 30%) = 34.5
So, New net cost,
= 115 + 34.5 = 149.5
Difference of labor cost = 149.5 - 125 = 24.5
% reduction = $$\frac{{24.5 \times 100}}{{149.5}}$$   = 17%(approx.)

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Comments ( 2 )

  1. Redwan Avir
    Redwan Avir :
    2 years ago

    let, raw material 100 then 15% up it is now 115
    30% increase in the labor cost of raw material so 30% of 115 is = 34.5
    when the cost was 25% raw material was priced at 100 so 25% of 100 is = 25
    now, the total increase when it became 30% is 115+34.5 = 149.5
    previously 25% so the total was = 125
    the difference = 149.5 - 125 = 24.5
    now, % = (24.5*100)/149.5 = 16.388 ~ 17%(appx.)

  2. Deepak Kumar
    Deepak Kumar :
    2 years ago

    24.5 kaha se aaya????

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