Question

The cost of production of a video game is Rs.5200. This is divided between material, labour and overheads in the ratio 5:6:2. If the video game is marked at a price that gives a 30% profit, find the marked price. If the cost of material, labour and overheads increased by 40%, 30% and 10% respectively, calculate the cost of manufacturing the video game now and the marked price so as to get the same percentage as before.

Answer 1

Total cost of production = Rs.5200
The ratio of material: labour : overhead = 5:6:2
∴ Total of the ratio
= 5 + 6 + 2
= 13
∴ Cost of material
= Rs.`(5/13 xx 5200)`
= Rs.2000
∴ Cost of labor
= Rs.`(6/13 xx 5200)`
= Rs.2400
∴ Cost of overhead
= Rs.`(2/13 xx 5200)`
= Rs.800
Cost price of the video game =Rs.55200
Profit = 30%
∴ Profit
= 30% of Rs.5200
= Rs.1560
∴ S.P.
= Rs.5200 + Rs.1560
= Rs.6760
So, marked price is Rs.6760
Cost of material = Rs.2000
Increase = 40%
∴ Increase 
= 40% of Rs.2000
= Rs800
∴ New cost of material
= Rs.2000 + Rs.800
= Rs2800
Cost of labour = Rs.2400
Increase = 30%
∴ Increase
= 30% of Rs.2400
= Rs.720
∴ New cost of labour
= Rs.2400 + Rs.720
= Rs.3120
Cost of overheads = Rs.800
Increase = 10%
∴  Increase
= 10% of Rs800
= Rs.80
∴ New cost of overheads 
= Rs.800 + Rs.80
= Rs.880
∴ Cost of manufacturing now
= Rs.(2800 + 3120 + 880)
= Rs.6800
Profit = 30%
`"S.P."/"C.P." = 1 + "Profit"/(100)`

⇒ `"S.P."/(6800) = 1 + (30)/(100)`

⇒ `"S.P."/(6800) = (100 + 30)/(100)`

⇒ S.P. = `(130)/(100) xx 6800`
= Rs.8840
The cost of manufacturing the video game now is Rs.6800, 
And the marked price now is Rs8840.