Question

marked price of an article is rs 2860 and the rate of vat is 8 percent. shopkeeper allows a discount of 20 percent and still makes a profit of 10 percent. if he spends 4 percent as over heads then find the original cost price of the article and final selling price including vat.

Answer 1

MRP = Rs. 2860. After VAT, Selling Price = Rs. 3088.80
Net Sale Price after a discount of 20% = Rs. 2471.04
Price before VAT is applied = 2860 - 20% = Rs. 2288

Let the Cost Price be X. Since the overheads are 4%, the new CP will be 1.04X.

Hence profit % can be calculated as (2288 - 1.04X)/1.04X
X = 2000

Hence the Cost Price of the article is Rs. 2000 and the final Selling price including VAT will be Rs. 2471.04

Answer 2

MRP = 2860      vat = 8%    
      expected  SP = 1.08 * MRP = 3088.80
But there is a discount  on MRP = 20%

So price before VAT is applied = 2860 - 20% = 2,860 - 572 = 2, 288.
Final Selling price including VAT = 2,288 * 1.08 = 2,471.04
==

Let Cost price = CP      overheads = 4%.
     cost including overheads = 1.04 CP

so profit = 2,288 - CP * 1.04
profit % = (2,288 - 1.04 CP)/[1.04 * CP] = 10/100

=> 2,288 - 1.04 CP = 0.104 CP
=> CP = 2,288/1.144 = 2,000