Question

I had some money with me. I bought a heavy painting for some price, transported it to my house and sold it for some price. If I am calculating profit made, what will be the effective cost price?

• A. Cost price of the painting
• B. Amount spent for its transportation
• C. Cost price of the painting + Amount spent for its transportation
• D. Cost price of the painting + $\frac{1}{2}$ (Amount spent for its transportation)

Answer 1

The correct option is C

Cost price of the painting + Amount spent for its transportation

Here, amount spent for its transportation is the overhead charge (amount spent for repairs/transportation/labour charges) which should always be added to the cost price of the item while calculating profit made on the sale.

Therefore, effective cost price is the sum of cost price of the painting and amount spent for its transportation.