Query

A company wishes to earn a 15 % profit margin on selling price when quoting for a job . Which of the following is the profit mark-up on cost which will achieve the required profit margin? show calculation also.

(a) 15 %

(b) 17.65%

(c)  85 %

(d) 13.04 %


 

Replies (11)

It will be 13.04% on cost

I am sorry...it will be 17.65% on the cost...if it is 15 on selling price
Dam sure 17.65 comes like this.. . If selling price is 100 then cost will be 85 (100-15) so now if cost is 85 thn profit is 15 so cost is 100 then profit will be 17.65

suppose the selling price is 100, then the profit will be 100*15% i.e. 15

and the cost will be 100-15 = 85

so the profit on cost will be 15/85*100=  17.65%

 

17.65%

Let the selling price be 100, profit 15, so cost will be 85 & profit margin on cost will be 15/85*100=17.65%

Dont understand why this Question (multiple choice) by Jyoti

See , Cost + profit = selling price If profit is 15 % on selling price. Take selling price as 100 Therefore cost will be 85 Equation becomes. 85 + 15 = 100 Now if you want the percentage on cost It is , 15/85 x 100 = 17.65 % Hope you could understand :)

Always remember this golden rule

1/X ON cost = 1/x+1 on sales

Profit on Cost will obviously be more than profit on sales applying common sense, unless you are selling a product less that its cost, in that case it will be loss and not profit

Y such a difficult question jyoti....:-D
17.65% is correct. assume selling price is rs. 100 so cost is rs. 85 (100-15) therefore profit % on cost = 15*100/85

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