Challenge problem · non-routine

Answer: 700 ₱

1. Work backwards from the selling price. The 20% profit is on the cost, so selling price $= 1.2 \times \text{cost}$.
2. $\text{cost} = 840 \div 1.2 = 700$.
3. (The tag price was $840 \div 0.8 = 1050$, but it is not needed to find the cost.) The cost was ₱700.