A. The difference between cost and selling price is Rs. 40 B. The selling price is 120% of the cost price
Both the options are correct,it depends on our assumption, if we assume CP as rs 100 then option B will be correct,and if we assume CP as rs 200 then option A will be right. BUT option B is right , because it fulfills all the conditions ,whatever CP we assume ,in all the cases option B will be correct , you can check by yourself, i hope it was useful!
Let x is the cost price
selling price 120% of X
120% x - x = 40 B
1.2x-x = 40
(1.2 - 1) x = 40
0.2x = 40
x = 40 / 0.2 => 200 B
Cost Price = 200 B
Selling Price = 200 + 200 * 20% = 240 B
Check = Selling Price - Cost Price => 40
240 B - 200 B = 40 B
Selling Price = 240 B, Cost Price is 200 B, Profit Amount is 40 B, where profit ratio is 20%
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