Explanation:

Let's break down the question:

- Relation between Prices:

- Marked Price (MP) of Watch = 150% of MP of Bag -> \( \text{MP of Watch} = 1.5 \times \text{MP of Bag} \)

- Cost Price (CP) of Watch = MP of Bag

- Transactions:

- Watch is sold at a 25% profit.

- Discount on Watch = Rs. 120

- Bag is sold at a 25% loss.

- Discount on Bag = Rs. 180

- Calculations:

Let MP of Bag = x.

Then, MP of Watch = 1.5x,

CP of Watch = x.

- For Watch:

Selling Price (SP) of Watch = CP of Watch + 25% Profit

\((SP = x + 0.25x = 1.25x)\)

Discount = MP of Watch - SP of Watch

\(1.5x - 1.25x = Rs. 120\)

\(0.25x = Rs. 120\)

\(x = Rs. 480\)

- For Bag:

CP of Bag = SP of Bag / (1 - 0.25)

MP of Bag - Discount = SP of Bag

\(x - 180 = SP of Bag\)

\(SP of Bag = 0.75 \times \text{CP of Bag}\)

\(\text{CP of Bag} = \frac{x - 180}{0.75}\). Calculate:

\(\text{CP of Bag} = \frac{480 - 180}{0.75} = \frac{300}{0.75} = 400\)

- The cost price of the bag is Rs. 400.