All-in landed cost and target margin — selling price per ream Bhajan Singh buys 120 reams at Rs 80 per ream, pays Rs 280 freight, octroi at 40 paise per ream, and Rs 72 as handling. What selling price per ream ensures an 8% overall gain?

Introduction / Context:
Landed cost includes purchase price plus all ancillary charges (freight, octroi, handling). Determine the total cost, apply the desired profit percentage to find the total revenue, and divide by the number of units to get the selling price per ream.

Given Data / Assumptions:

• Purchase: 120 × 80 = Rs 9,600.
• Freight: Rs 280.
• Octroi: 0.40 × 120 = Rs 48.
• Handling: Rs 72.
• Target gain: 8%.

Concept / Approach:
Total landed cost = 9,600 + 280 + 48 + 72. Target revenue = landed cost × 1.08. Selling price per ream = Target revenue / 120.

Step-by-Step Solution:
Landed cost = 9,600 + 280 + 48 + 72 = Rs 10,000.Target revenue = 10,000 × 1.08 = Rs 10,800.SP per ream = 10,800 / 120 = Rs 90.

Verification / Alternative check:
Per-ream landed cost = 10,000/120 ≈ 83.333; 8% gain ⇒ 83.333 × 1.08 ≈ 90.00 (confirms).

Why Other Options Are Wrong:
Rs 86, 87.48, 89 underachieve 8%; Rs 92 exceeds the required margin.

Common Pitfalls:
Ignoring octroi/handling or averaging rates instead of summing cash costs before applying the margin.

Final Answer:
Rs 90