Let us suppose that one bag of cement (50 kgs) consumes 100 kgs of limestones and 10 units of power. The only other cost item in producing cement is in the form of wages. During 1993-94, limestone, power and wages contribute, respectively, 20%, 25%, and 15% to the cement price per bag. The average operating profit (% of price per cement bag) earned by a cement manufacturer during 2002-03 is closest to
Explanation:
WPI of cement in 2002-03 = 104
Operating cost of cement can be calculated as below:
∴ Operating Profit per bag of cement
=104-63.795104× 100 = 38.7%
Hence, option (c).
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