A merchant marked the price of an article by increasing its production cost by 40%. Now he allows 20%discount and gets a profit of Rs. 48 after selling it. The production cost is

let the production cost(PC) be rs 100

marked price (MP) = 140% production cost { production cost = rs 100}

MP = rs 140

discount = 20%

$$discount = \frac{20}{100}\times $$140 {$$\because  discount = \frac{discount percentage}{100}\times $$MP}

discount = rs 28

selling price (SP) = rs 112 

profit = SP - PC = 112 -100 = 12

here Rs 12 is when PC = rs 100

now when profit = rs 48  { $$\because$$ 12 $$\times $$ 4 = 48}

PC = 4 $$\times$$100 = rs 400