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 answer is Rs.4000.
Step 1: Define the variable for Production Cost
Let the original production cost of the computer be .
Step 2: Calculate the Listed Price
The retailer sets the listed price 80% higher than the production cost.
Step 3: Calculate the Distributor's Buying Price
The distributor buys the computer at a 50% discount (markdown) on the listed price.
Step 4: Calculate the Retail Customer's Buying Price
The distributor resells the computer to a retail customer at a 25% margin over their purchase cost.
Step 5: Solve for the Production Cost ()
We are 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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