PROFIT & LOSS
1) A buyer purchases an article at which price is called the Cost Price (CP), of the article for the buyer.
2) A seller sells an article at which price is called the Selling Price (SP), of the article for the seller.
3) If the Sell Price (SP) of an article is more than its cost price (CP), there is profit for the seller.
profit
Profit = SP – CP, Profit % = ------------ X 100
CP
b) If the CP of an article is more than it’s SP, there is a loss for the seller.
Loss
Loss = CP – SP, Loss % = ----------- X 100
CP
c) If there is a profit of x%, SP = CP + Profit
x
= CP + x% of CP = CP + ---------- X CP 100
x
So, SP = ( 1 + -------- ) CP
100
d) If there is a loss of x%, SP = CP – Loss
x
= CP – x% of CP = CP - --------- X CP 100
x
So, SP = ( 1 - --------- ) CP
100
4) It has been decided that, the overhead expenses are the additional expenses borne by a buyer on things such as transportation, rent, repair, salaries, tax & commission. These additional expenses are also called overhead charges. Overhead expenses are added to the cost price to determine the final cost price.