Finding the Cost Price of a Chair from Selling Price and Loss Percentage

To determine the cost price (CP) of the chair from the given selling price (SP) and loss percentage, we can use basic formulas related to profit and loss calculations.

Problem Statement

• Selling Price (SP): ₹1564
• Loss Percentage: 15%

Solution Steps

1. Understanding Loss Percentage:
   • A loss percentage of 15% means that the selling price is 85% (100% – 15%) of the cost price.
2. Formula:
   • If the selling price is
     $SPSP$ 

     SP and the loss percentage is $L\mathrm{\%}L\backslash \%$ 

     L%, the cost price $CPCP$ 

     CP can be calculated using the formula: $CP=\frac{SP\times 100}{100-L}CP\; =\; \backslash frac\{SP\; \backslash times\; 100\}\{100\; –\; L\}$ 

     CP=100−LSP×100​

   • In this case,
     $L=15\mathrm{\%}L\; =\; 15\backslash \%$ 

     L=15%.

3. Calculation:

   $CP=\frac{1564\times 100}{100-15}CP\; =\; \backslash frac\{1564\; \backslash times\; 100\}\{100\; –\; 15\}$CP=100−151564×100​

   $CP=\frac{1564\times 100}{85}CP\; =\; \backslash frac\{1564\; \backslash times\; 100\}\{85\}$CP=851564×100​

   $CP=\frac{156400}{85}CP\; =\; \backslash frac\{156400\}\{85\}$CP=85156400​

   $CP=1840CP\; =\; 1840$CP=1840Therefore, the cost price of the chair is ₹1840.

Recent Examples of Application

1. Retail Business:
   • A retail store dealing in furniture may use such calculations to determine the original cost price of items that are sold at a discount or suffer a loss due to clearance sales. For instance, a furniture store facing an unsold stock of chairs might use similar calculations to understand their financial position after selling at a loss.
2. E-commerce Platforms:
   • Online marketplaces often have to calculate the cost price of products based on selling prices and discounts. If an e-commerce platform sells an item at a loss during a sale event, it uses such formulas to manage inventory and assess financial outcomes. For example, if an online retailer sells a chair at ₹1564, which results in a 15% loss, they would use this calculation to determine the original cost price to plan future pricing strategies.
3. Business Accounting:
   • In business accounting and financial reporting, understanding the cost price in relation to selling price and loss percentages helps in accurate profit and loss analysis. For instance, a business analyst might use these calculations to assess the impact of losses on overall profitability and make strategic decisions regarding pricing and inventory management.

By applying this formula, businesses and individuals can accurately determine the cost price of products, aiding in financial planning and decision-making.