PROFIT & LOSS
In this session, we learn some very important part of Profit & Loss
The price at which a buyer purchase an article from a seller is called the cost price (CP) of the article for the buyer.
The price at which a seller sales an article to a buyer is the sale price or the selling price (SP) of the article for the seller.
If the sale price is more than the cost price for the seller then the seller makes a profit
Profit
Profit = SP – CP, Profit % = ------------- X 100
CP
If the cost price is more than the sale price for the seller than the seller incurs a loss
Profit
Loss = CP – SP, Profit % = ---------------- X 100
CP
Total Profit
Profit per cent = -------------------- X 100
Cost Price
Total Loss
Loss per cent = ------------------ X 100
Cost Price
If the selling price and profit or loss percent are given then assume the cost price to be Rs. 100 and we have to find the corresponding selling price. then we have to use the unitary method to find the actual cost price.
Marked price –
The marked price of an article is the price printed on the package or on the price tag attached to the article. Generally, this is the price at which the dealer sells the article to the buyer.
Discount-
When any shopkeeper or any dealer sells an article for a price that is lower than the marked price, the difference between the marked price and the selling price is called Discount.
Discount = marked price – selling price,
Selling price = marked price – discount.
Discounts may be offered as a sum of money or a percentage of the marked price.
For, example a company may offer a discount of $20 on the marked price of shirt ,
Which means that the sale price = marked price - $20.
On the other hand, another company may offer a discount of 25 % on the marked price of a table fan. In this case, selling price = marked price – 25 % of the marked price
In general, Discount = Discount percentage as fraction X marked price
And, Discount % = ( discount ÷ marked price ) X 100
Overhead charges –
In addition to what he spends on buying goods, a dealer may have to spend on transport, rent, repair, taxes, salaries, etc. these are taken into account while calculating the cost price of an article. These additional expenses are called overhead charges or overhead expense. The overhead expenses of the manufacturer are also taken into account while calculating the cost price
Example –
1) If the marked price is $40 and the selling price is $25. find the discount and the discount percent
Ans.) As per the given condition and given -
Discount = marked price – selling price
= 40 – 25 = $ 15
Discount % = ( discount ÷ marked price ) X 100
15
= ---------- X 100 = 37.5 % (Ans.)
40
2) The marked price of a refrigerator is $ 800. It is sold at a discount of 8%, find its selling price.
Ans.) As per the given condition there is a discount they offered by 8%
8
So, $ 800 X --------- = $ 64
100
So, selling price would be = 800 – 64 = $ 736
The Selling price is $ 736 (Ans.)
3) A carpenter made a table set and decided to sell by $ 1000, but due to the bad situation he decided to sell out the same by the 20 % discount, now find out the selling price
Ans.) The price of the Table Set is $ 1000
Now, if there are a discount by 20 %, then -
20
$ 1000 X ------------ = $ 200
100
As per the formula, Sell Price = Marked Price – Discounted Price
= $ 1000 - $ 200 = $ 800 (Ans.)