Profit and Loss — A shop charges 28% above cost. If the customer paid ₹ 8960 for the cell phone (this is the SP), find the Cost Price (CP). Use the markup relation SP = (1 + 28%) * CP.
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A₹ 7800
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B₹ 7000
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C₹ 6900
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D₹ 6850
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E₹ 7200
Answer
Correct Answer: ₹ 7000
Explanation
Introduction / Context: Markup problems specify the percentage added on CP to quote SP. Recovering CP from SP involves dividing by the markup factor rather than multiplying.
Given Data / Assumptions:
- SP = ₹ 8960
- Markup = 28% above CP
- SP = 1.28 * CP
Concept / Approach: Rearranging SP = 1.28 * CP gives CP = SP / 1.28. Substitute and compute directly.
Step-by-Step Solution:
CP = 8960 / 1.28Compute: 8960 / 1.28 = 7000Therefore, CP = ₹ 7000Verification / Alternative check: Check forward: SP = 1.28 * 7000 = 8960, which matches the paid price, validating the computation.
Why Other Options Are Wrong: ₹ 7800, ₹ 6900, ₹ 6850, and ₹ 7200 do not produce SP = ₹ 8960 when marked up by 28%. Only ₹ 7000 satisfies the equation.
Common Pitfalls: Multiplying SP by 1.28 instead of dividing, or confusing markup on CP with discount on SP. Always identify the correct base.
Final Answer: ₹ 7000