The following pie-chart shows the percentage distribution of the expenditure incurred in manufacturing a certain product X. Study the pie-chart and answer the question that follows.

The price of this product is marked 20% above the cost price. If the marked price of the product is ₹150, then what is the cost of the direct material (in ₹) used in a single unit of the product?

Correct option is B

Given:

The marked price (MP) of the product = ₹150

The marked price is 20% above the cost price (CP), i.e.,

Direct Material Cost is 22% of the cost price.

Solution:

MP = CP + 20% of CP

MP = 1.2$$\times CP$$​

CP =$$\frac{MP}{1.2} = \frac{150}{1.2} = 125$$​

​$$\text{Direct Material Cost} = 22\% \text{ of } CP = \frac{22}{100} \times 125 = 27.5$$​