The price of raw materials has gone up by 15%, labour cost has also increased from 25% of the cost of raw material to 30% of the cost of ra…

We know that, total cost = price of raw materials +labor cost

Assume that, initial price of raw materials = R

Initial labor cost = 25% of the cost of raw material = 0.25 × R

∴total cost =R + 0.25 × R = 1.25 × R

Now, the cost of raw material increases by 15%.

Thus, new price of raw materials = R + (15% of R) = 1.15 × R

New labor cost = 30% of 1.15R = 0.3 × 1.15R = 0.345R

∴New total cost = new price of raw materials + new labor cost

⇒New total cost = 1.15R + 0.345R = 1.495R

Total increase in total cost = 0.245 × R

Percentage reduction required = $(\frac{{0.245{\rm{\;}} \times {\rm{\;R}}}}{{1.495{\rm{\;}} \times {\rm{\;R}}}} \times 100 = 16.38\% )$