The cost of raw materials of a product increases by 30%, the manufacturing cost increases by 20% and the selling price of the product increases by 60%. The raw material and the manufacturing cost originally formed 40% and 60% of the total cost respectively. If the original profit percentage was one - fourth the original manufacturing cost, find the approximate new profit percentage.

Answer: Option A

Let the total initial cost of production be Rs. 100
Then,
manufacturing cost = Rs. 60
Cost of raw materials = Rs. 40
Original Selling Price
$$\begin{array}{rl}& =\text{Rs}\text{.}\left(100+\frac{60}{4}\right)\\ & =\text{Rs}\text{. }115\end{array}$$
New cost of raw materials = 130% of Rs. 40 = Rs. 52
New Manufacturing cost = 120% of Rs. 60 = Rs. 72
New cost of the product = Rs. (52 + 72) = Rs. 124
New S.P. = 160% of Rs. 115
$$\begin{array}{rl}& =\text{Rs}\text{.}\left(\frac{160}{100}\times 115\right)\\ & =\text{Rs}\text{. }184\end{array}$$
New profit = Rs. (184 - 124) = Rs. 60
$$\begin{array}{rl}& \therefore \text{New profit }\%\\ & =\left(\frac{60}{124}\times 100\right)\%\\ & =48.39\%\end{array}$$