Understanding Discounts

A discount is a decrease in the original price of an item. It is often expressed as a percentage of the original price. For example, a 20% discount means that you pay 80% of the original price.

Cost Price Definition

Cst price is the amount of money spent to create products or services before any profit is added for the manufacturer or provider. It is also known by several other names, including real cost, final cost, and average cost. A cost price includes any additional pay, such as production, property expenses, materials, power, testing, worker wages, and everything else that must be paid for. It can be written as CP. 

Example: A man had purchased a plot of land at a price of Rs.35000 some 10 years ago and the price of that particular plot at present is Rs.200000. For him, the Cost price of the land is Rs. 35000, and the Market price is Rs.200000.

Selling Price Definition

The actual price at which an item is sold after all the discounts are given to the customer on the product market price is referred to as the selling price. The selling price is used to determine the cost of selling an object and may be computed using the selling price formula. The selling price is the amount paid by the customer to purchase the goods. The actual selling price is the amount paid by a customer for a product or service. This is the price that is more than the cost of products and includes a proportion of profit. It can be written as SP.

Discount Rate

The reduction in the price of products or services supplied by shops at the indicated price is referred to as a discount. Discounts are commonly described using phrases such as “off” and “reduction.” It should be noted that the discount is always determined by the article’s marked price (list price).

The difference between the market price and the selling price is termed a Discount. This percentage of the rebate is typically provided to encourage sales or clear out outdated inventory.