Shortcut Trick
In this case, since the Selling Price is equal to the List Price, the Gross Profit is simply the Discount amount.
Net Profit = Discount − Expenses
Discount = 20% of 1,574.80 = 314.96
Net Profit = 314.96 − 45.40 = 269.56
∴ The correct answer is Rs. 269.56.
Alternate Method
Given:
List Price = Rs. 1,574.80
Discount Rate = 20%
Freight Expenses = Rs. 45.40
Selling Price = List Price
Formula Used:
Purchase Price = List Price − Discount
Total Cost Price = Purchase Price + Expenses
Profit = Selling Price − Total Cost Price
Calculations:
⇒ Discount = 20% of 1,574.80
⇒ Discount = (20 ÷ 100) × 1,574.80 = 314.96
⇒ Purchase Price = 1,574.80 − 314.96 = 1,259.84
⇒ Total Cost Price = 1,259.84 + 45.40 = 1,305.24
⇒ Selling Price = 1,574.80
⇒ Profit = 1,574.80 − 1,305.24 = 269.56
∴ The correct answer is Rs. 269.56.
Additional Information
Total Cost Price (Effective CP)
It includes the Purchase Price plus all additional overhead expenses such as freight, transportation, repairs, and labor charges.
Discount on List Price
Discount is always calculated on the List Price (or Marked Price) unless specified otherwise. Net Price = LP × (100 − D)%.
Profit Percentage
Profit % = (Profit ÷ Total Cost Price) × 100. It measures the gain relative to the total investment.