One article is sold at 10% profit and another (different article) is sold at 20% loss.
Determine the ratio of their cost prices so that the seller breaks even (overall no profit, no loss) on the two articles combined.
Show answer & explanation
Correct answer: B
Explanation
Given:
Profit on the first item = 10%
Loss on the second item = 20%
Cost price of the first item = x
Cost price of the second item = y
SP₁ = 1.1x
SP₂ = 0.8y
No profit, no loss ⇒ Total SP = Total CP
1.1x + 0.8y = x + y
0.1x = 0.2y
x / y = 2 / 1
Ratio of cost prices = 2 : 1