Lokesh marks up his goods 20% above cost price and allows 25% discount on them while selling. if he sells the article for Rs 1080, then what was the cost price?

Options

A. Rs 1200
B. Rs 1080
C. Rs 1134
D. Rs 1120

Answer

To find the cost price of the article Lokesh is selling, we can follow these steps:

### Step 1: Understand the relationship between cost price, marked price, and selling price.
Let’s denote:
- Cost Price (CP) = x
- Marked Price (MP) = CP + 20% of CP = x + 0.2x = 1.2x
- Selling Price (SP) = MP - Discount

### Step 2: Calculate the marked price.
If we assume the cost price (CP) is Rs 100, then:
- Marked Price (MP) = 120% of CP = 120% of 100 = Rs 120.

### Step 3: Calculate the discount.
The discount given is 25% on the marked price. Therefore:
- Discount = 25% of MP = 25% of 120 = 0.25 * 120 = Rs 30.

### Step 4: Calculate the selling price.
Now, we can find the selling price (SP):
- SP = MP - Discount = 120 - 30 = Rs 90.

### Step 5: Set up the equation with the given selling price.
According to the problem, Lokesh sells the article for Rs 1080. We can set up the equation based on our earlier calculation:
- If SP = Rs 90 corresponds to CP = Rs 100, then we can write:
\[ \frac{SP}{CP} = \frac{1080}{x} \]
Therefore, we have:
\[ \frac{90}{100} = \frac{1080}{x} \]

### Step 6: Solve for the cost price (x).
Cross-multiplying gives:
\[ 90x = 1080 * 100 \]
\[ 90x = 108000 \]
Now, divide both sides by 90:
\[ x = \frac{108000}{90} = 1200 \]

### Conclusion:
The cost price of the article is Rs 1200.