Steel manufacturing requires the use of iron ore, power and manpower. The cost of iron ore has followed the All Item index. During 1993-94 power accounted for 30% of the selling price of steel, iron ore for 25%, and wages for 10% of the selling price of steel. Assuming the cost and price data for cement as given in the previous question, the operating profit (% of selling price) of an average steel manufacture in 2002-03
Explanation:
WPI of steel in 2002-03 = 105.5
∴ Operating Profit per bag of steel in 2002-03
=105.5-69.43105.5 × 100 = 34.2%
∴ Profit percentage of a steel manufacturer in 2002-03 is less than the profit percentage of a cement manufacturer in 2002-03.
Hence, option (b).
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