A wholesaler sells a jacket to a retailer at a profit of 25% on his cost price, and the retailer sells it to a customer at a further profit of 20% on his own cost. If the customer pays Rs 2400 for the jacket, what did the jacket cost the wholesaler?

Introduction / Context:
This is a two stage profit question where an article passes from wholesaler to retailer and then to final customer. Each seller adds his own percentage profit. The learner must work backwards from the final selling price to find the original cost price of the wholesaler.

Given Data / Assumptions:
- Wholesaler sells to retailer at 25% profit. - Retailer sells to customer at 20% profit. - Final price paid by the customer = Rs 2400. - There are no extra taxes or hidden charges beyond the profit rates mentioned.

Concept / Approach:
Let the wholesaler's cost price be W. He sells to the retailer at:
retailer cost = W * (100 + 25) / 100 = W * 1.25. This amount becomes the retailer's cost price. The retailer then sells to the customer at 20% profit:
customer price = retailer cost * 1.20. We know the customer price is Rs 2400, so we can write and solve an equation to find W.

Step-by-Step Solution:
Step 1: Let wholesaler cost price be W. Step 2: Retailer cost = W * 1.25. Step 3: Customer price = (W * 1.25) * 1.20 = W * 1.5. Step 4: Given customer price is Rs 2400, so W * 1.5 = 2400. Step 5: Therefore W = 2400 / 1.5 = 1600. Step 6: The jacket cost the wholesaler Rs 1600.

Verification / Alternative check:
Check the intermediate prices. If W = 1600, wholesaler sells to retailer at 25% profit: retailer cost = 1600 * 1.25 = 2000. Retailer then sells at 20% profit: customer price = 2000 * 1.20 = 2400. These match the given final price, confirming that the wholesaler's cost price is correct.

Why Other Options Are Wrong:
If W were 2000, the customer price would be 2000 * 1.25 * 1.20 = 3000, not 2400. If W were 1800, the final price would be 1800 * 1.25 * 1.20 = 2700. If W were 2250, the final price would exceed 2400. Therefore none of those values fits the data given in the question.

Common Pitfalls:
Common errors include adding the percentages directly or averaging them, which is incorrect in successive profit situations. Another mistake is to subtract the percentages from the final price instead of dividing by the corresponding multipliers. Always apply percentage changes multiplicatively and in reverse order when working backwards.

Final Answer:
The jacket cost the wholesaler Rs 1600.