The retail price of a bag of fertiliser is capped by law at ₹1350. A dealer buys each bag at ₹1000 and pays a further ₹60 a bag in transport and ₹20 a bag in storage. His profit percent, reckoned on everything the bag costs him, is:

A bag really costs him 1000 + 60 + 20 = ₹1080, so the profit is 1350 − 1080 = ₹270 and 270/1080 = 25%. (Ignoring transport and storage gives 350/1000 = 35%. Keeping the true ₹270 profit but dividing it by the ₹1000 purchase price alone gives 27%, and dividing it by the ₹1350 selling price gives 20% — profit percent is always measured on cost, and cost here means every rupee the bag absorbs.)