A dealer buys an article listed at 750 and gets successive discounts of 10% and 20% on it. He spends 100 on its transportation. At what price should he sell it to earn a profit of 15%?

1. A

   736

2. B

   712

3. C

   720

4. D

   786

Appeared in: AIIMS BHOPAL NO- 2018( Shift-2nd)

Explanation

• The calculation starts with the list price of 750 and applies the two successive discounts (10% and then 20%) to find the net purchase price of 540.
• The total cost price (CP) is found by adding the overhead transportation cost (100) to the purchase price, resulting in a total CP of 640.
• The final selling price is determined by calculating a 15% profit on the total cost price (15% of 640 = 96) and adding it to the total CP (640 + 96 = 736).

Why Other Options Were Wrong

• Option B: This value is incorrect and likely results from a miscalculation, such as applying the profit percentage to the wrong base amount or an arithmetic error in one of the steps.
• Option C: This value is incorrect. It may arise from incorrectly combining the discounts into a single 30% discount (750 * 0.7 = 525), adding transport (525 + 100 = 625), and then calculating profit (625 * 1.15 = 718.75, which is close to 720). Successive discounts must be calculated sequentially.
• Option D: This value is too high. It might result from incorrectly calculating the 15% profit on a different base, such as the price after only the first discount (675 * 1.15 = 776.25, which is in the proximity of 786), or miscalculating the discounts.

Related Visual

Clinical Relevance

• Nursing practice connection: This is primarily an exam-oriented knowledge point with limited direct bedside application, so retain Profit and Loss Calculation with Successive Discounts and Overhead Costs as background academic context rather than a clinical decision trigger.
• Understanding how to calculate total cost, including overheads, is a fundamental concept in business and personal finance.
• This problem highlights the difference between successive discounts and a flat discount, a common point of confusion.
• What if the 15% profit was to be earned on the selling price (a 15% margin) instead of the cost price? The calculation would change: Selling Price (SP) = Cost Price / (1 - Profit Margin) -> SP = 640 / (1 - 0.15) = 640 / 0.85 ≈ 752.94. This demonstrates the important distinction between markup (profit on cost) and margin (profit on sale price).

How to Approach the Question

• First, identify all the given values: List Price (750), discount percentages (10% and 20%), overhead cost (100), and desired profit percentage (15%).
• Calculate the net purchase price by applying the successive discounts one by one. Remember that the second discount is applied to the price after the first discount has been deducted.
• Determine the total Cost Price (CP) by adding the overhead expenses (transportation cost) to the net purchase price.
• Calculate the final Selling Price (SP) by adding the desired profit to the total CP. The profit amount is calculated as a percentage of the total CP.
• Compare your final calculated SP with the given options to find the correct answer.

Concept Tested & Keywords

• Concept Tested: Profit and Loss Calculation with Successive Discounts and Overhead Costs
• Stem keywords: dealer, listed at 750, successive discounts, 10%, 20%, spends 100 on transportation, profit of 15%
• Lead-in keywords: At what price should he sell

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