A retailer sets the listed price of a computer 80% higher than its production cost. A distributor buys the computer at a 50% markdown on the listed price and subsequently resells it to a retail customer at a 25% margin. If the customer bought the computer for Rs. 4500, calculate the original production cost of the computer.
Correct Answer :
Rs.4000
Solution :
The correct option is Rs.4000.
Step 1: Express the listed price in terms of the production cost.
Let the original production cost of the computer be .
The retailer sets the listed price 80% higher than the production cost:
Step 2: Calculate the price paid by the distributor.
The distributor buys the computer at a 50% markdown on the listed price:
Step 3: Calculate the selling price to the customer.
The distributor resells the computer to a retail customer at a 25% margin (markup on cost):
Step 4: Solve for the production cost.
Given that the customer bought the computer for Rs. 4500:
Therefore, the original production cost of the computer is Rs. 4000.
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