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Get access to the detailed solutions to the previous years questions asked in IIFT exam
Let the production cost be Rs. 100
The, Selling Price = Rs. 120
Price of component A = Rs. 10
Price of component B = Rs. 20
Price of other components = Rs. (100 - 10 - 20) = Rs. 70
After increase in prices,
Price of component A = Rs. 12
Price of component B = Rs. 28
Price of other components = Rs. 70
Total Cost of production = Rs. (12 + 28 + 70) = Rs. 110
Selling price = Rs. (1.15 * 120) = Rs. 138
Profit = Rs. 28
Profit % = 25.45%
Hence, option B is the correct answer.