The price of raw materials has gone up by 15%, labor cost has also increased from 25% of the cost of raw material to 30% of the cost of raw material. By how much percentage should there be reduction in the usage of raw materials so as to keep the cost same?

Answer: Option B

Let the initial cost of raw material be 100. So, initial labor cost was 25 and net cost was 125
Now,
15% increment in raw materials cost and labor cost has gone up to 30% from 25 %
Raw material cost = 115 And
Labor cost = (115 × 30%) = 34.5
So, New net cost,
= 115 + 34.5 = 149.5
Difference of labor cost = 149.5 - 125 = 24.5
% reduction = $$\frac{24.5\times 100}{149.5}$$   = 17%(approx.)