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Ratios with labor costs and material costs

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If the ratio of labor costs to materials costs is ½ and labor costs are decreasing by 10 percent per year while material costs are increasing by 10 percent per year, what is the ratio at the end of the second year? (Note: This means that at the present time labor costs are 50 percent of materials costs.” Does the result seem reasonable?

Apr 5th, 2015

Assume labor cost is x, then materials cost would be 2x

By next year, labor costs decrease by 10 percent, which becomes 0.9x. Materials costs increase by 10 percent, which is 2x*1.1

So the rato for next year is 0.9x/2.2x=9/22

Apr 4th, 2015

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Apr 5th, 2015
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Apr 5th, 2015
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