A shopkeeper buys shirts from a producer and sells them at 20% profit. A customer has to pay Rs.1,770.00 including 18% G...

Question

A shopkeeper buys shirts from a producer and sells them at 20% profit. A customer has to pay Rs.1,770.00 including 18% GST, per shirt. At what price did the shopkeeper buy each shirt from the producer?

A. Rs.800  B. Rs.1,975.40  C. Rs.1,250.00  D. Rs.2,548.80

Accepted Answer

The shopkeeper bought each shirt from the producer at Rs.1,250.00. A price chain exists: Producer -> Shopkeeper (adds 20% profit) -> Customer (pays with 18% GST on top). Given the final customer payment, we work backwards: strip the GST layer first, then strip the profit layer to reach the original cost price. This reverse-calculation approach is the cleanest way to solve such layered pricing problems.