✨ Understanding Discount & Overhead Expenses

🔹 What is a Discount?

A discount is a reduction in the Marked Price (MP) of an item. It is usually given in percentage form to attract buyers.

📌 Formula for Discount:

Discount=Marked Price−Selling Price

✅ This means the discount is the difference between the original price and the price after reduction.

📌 Example:
A jacket has a Marked Price of ₹2000 and is sold at ₹1600.

Discount=2000−1600=₹400

🔹 How to Calculate Discount When Discount % is Given?

When a shop offers a discount percentage, we use the formula:

Discount Formula = {Discount%}{100} × text{MP}

📌 Example:
A shop gives a 20% discount on a ₹1500 shirt.

Discount=20100×1500=300

✅ The Selling Price (SP) is:

SP=MP−Discount=1500−300=₹1200

💡 More Discount = Lower Selling Price!

🔹 What are Overhead Expenses?

After buying an item, additional costs like transportation, taxes, repair, packaging, or setup fees may be added. These are called Overhead Expenses and are included in the Cost Price (CP).

📌 Formula:

$$\text{es}$$

📌 Example:
A shopkeeper buys a machine for ₹5000, and spends ₹500 on transportation and ₹200 on installation.

🔹 Overhead Expenses = ₹500 + ₹200 = ₹700
🔹 Total Cost Price (CP) = ₹5000 + ₹700 = ₹5700

✅ The seller must sell above ₹5700 to make a profit!

🔹 Key Takeaways

✔ Discount = Reduction on Marked Price
✔ Discount Formula = {Discount%}{100} × text{MP}
✔ Overhead Expenses = Extra costs added to CP
✔ CP Formula = Buying Price + Overhead Costs

💡 Real-Life Examples
🏬 Shopping Malls – Festival Discounts
🛒 Online Stores – Coupons & Cashback
🚗 Buying a Car – Insurance & Registration Costs
🏡 Home Purchases – Renovation & Maintenance