The percentage distribution of the expenditure incurred in publishing a book is as follows:Printing Cost = 20\

Question

The percentage distribution of the expenditure incurred in publishing a book is as follows:Printing Cost =

20%

Paper Cost =

25%

Royalty =

15%

Binding =

20%

Promotion Cost =

10%

Transportation Cost =

10%

If

2500

copies are published and the printing cost for them amounts to

Rs. 160, 000

, then what should be the selling price of a book such that the publisher can earn a profit of

25%

?

Accepted Answer

Given that the printing cost represents

20%

of the total cost.

Printing Cost for 2500 copies = Rs. 160, 000

Let the total cost of production for

2500

copies be

TC

.

20% of TC = 160, 000 ⟹ TC = \frac{160 , 000 \times 100}{20} = 800, 000

The total cost price per book (

CP

) is:

CP = \frac{800 , 000}{2500} = Rs. 320

To earn a profit of

25%

, the selling price (

SP

) should be:

SP = CP \times (1 + \frac{Profit %}{100}) = 320 \times 1.25 = Rs. 400

Solution & Step-by-step Explanation