A furniture store marks its items at 80% above the cost price. They offer a discount of 30% on the marked price. If a customer receives an additional loyalty discount of ₹250, and the store still makes a 12% profit on the cost price, what is the cost price of the furniture item?
- AOption (a)
₹1,785.71
- BOption (b)
₹2,585.36
- COption (c)
₹1,528.24
- DOption (d)
₹2,879.45
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Correct answer
₹1,785.71
Why this answer is correct
Shortcut Trick
Let Cost Price (CP) be 100%.
Marked Price (MP) = 180% (since markup is 80% above CP).
Selling Price (SP) after 30% discount = 180% × 0.7 = 126%.
With an additional profit of 12%, the actual SP = CP + 12% profit = 112%.
The difference in SP represents the loyalty discount: 126% − 112% = 14%.
CP (100%) = (₹250 ÷ 14) × 100 ≈ ₹1,785.71.
∴ The correct answer is ₹1,785.71.
Alternate Method
CP
SP
MP
Markup: +80%
Discount: -30% & -₹250
Profit: +12%
Given:
Markup = 80%
Discounts = 30% and an additional loyalty discount = ₹250
Profit = 12%
Formula Used:
MP = CP × (1 + Markup% ÷ 100)
SP = MP × (1 − Discount% ÷ 100) − Loyalty Discount
SP = CP × (1 + Profit% ÷ 100)
Calculations:
⇒ Let the Cost Price (CP) be 100x.
⇒ MP = 100x × 1.80 = 180x
⇒ SP after standard 30% discount = 180x × (1 − 0.30) = 180x × 0.70 = 126x
⇒ Final SP = 126x − 250
⇒ According to the profit margin, SP = 100x × 1.12 = 112x
⇒ Equating the selling prices: 126x − 250 = 112x
⇒ 126x − 112x = 250
⇒ 14x = 250
⇒ x = 250 ÷ 14 = 125 ÷ 7
⇒ CP = 100x = 100 × (125 ÷ 7) = 12500 ÷ 7
⇒ CP ≈ ₹1,785.71
∴ The correct answer is ₹1,785.71.
Additional Information
Marked Price & Discount
Discount is always calculated on the Marked Price (MP) unless specified otherwise. Net Selling Price = MP − Discount.
Successive Discounts
If two successive discounts of a% and b% are given, the equivalent single discount is [a + b − (a × b)÷100]%.
Direct CP to MP Ratio
When Profit% (P) and Discount% (D) are given, their relationship is simply derived as CP ÷ MP = (100 − D) ÷ (100 + P).