Latest IBM Aptitude Question SOLUTION: If we have fixed costs of $50,000 on a product and want to have a profit margin of 25%, how much should we charge the customer to buy it?

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If we have fixed costs of $50,000 on a product and want to have a profit margin of 25%, how much should we charge the customer to buy it?

Asked In IBM (12 years ago)

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stuti  (10 years ago)

62500...............

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Aditya sahu  (11 years ago)

Suppose we knew the
price we're going to charge; I'll call it X. Then the margin would be
25% of that, or 0.25 times X. The cost would be that much less than X:

cost = X - 0.25X

But 1 times X, minus 0.25 times X, is 0.75 times X. That is, 100% -
25% is 75%. So

cost = 0.75X

But now we can find X, because we know the cost is $50,000!

50,000 = 0.75X

X = 50,000 / 0.75

That is, we undo the multiplication by 0.75, by dividing 50,000 by
0.75. So

X = $66,666.67

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