Reflecting on Calculating Cost Price with Discount and Profit Margin

How can we calculate the cost price of an article when the selling price is known after a discount and profit margin?

Given data: The price of an article is marked as 12000 sh. Mr. Omanga sold the article at a discount of 10% and still made a profit of 8%. Calculate the cost of the article.

Answer:

The cost of the article is 10000 sh, close to option A.

Explaining the Calculation:

To calculate the cost of the article in this scenario, we need to follow a step-by-step approach based on the information provided. Let's break it down:

A discount of 10% on the marked price of 12000 sh would be 10% of 12000, which is (10/100) * 12000 = 1200 sh. Therefore, the selling price after the discount is 12000 sh - 1200 sh = 10800 sh.

We know that Mr. Omanga still made a profit of 8% on the cost price. Let's denote the cost price of the article as C sh.

Profit = Selling Price - Cost Price

8% of C = 10800 sh - C

Simplifying the equation, we get:

0.08C = 10800 sh - C

1.08C = 10800 sh

C = 10800 sh / 1.08

C = 10000 sh

Therefore, the cost of the article is 10000 sh. This calculation helps us understand how to determine the original cost price of an article even after applying discounts and achieving a profit margin.