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Profit and Loss

Concept of Profit and Loss

This Chapter is one of the most important chapters in the arithmetic section. For Data Interpretation (D.I) and Data Sufficiency (D.S), this chapter is also important.

Now we are going to discuss this chapter.

Cost Price:

The price at which an article is purchased or the money paid by the shopkeeper to the manufacturer to buy the goods is called the cost price (CP) of the goods.

Selling Price:

The price at which an article is sold is called its selling price. It is denoted by SP.

Profit or Gain:

If the selling price of an article is more than its cost price then the seller is said to have a profit or gain.

Loss:

If the selling price of an article is less than its cost price then the seller is said to have a loss.

Remember Profit and Loss are always counted on Cost Price

Some important Formulae:

Example 1

A man purchases an item for Rs. 80. Then he sells it at 30 percent profit. Find the selling price of the item.

Solution:

Example 2

Find the selling price of an article whose cost price is 120 Rs. and sold at 25% profit.

Solution:

Example 3

Find the cost price of an article which is sold for Rs. 100 at a profit of 25%.

Solution:

Example 4

A shopkeeper buys 100 eggs at Rs. 1.50 per price. During transportation 4 eggs got spoiled. The shopkeeper sells the remaining eggs at Rs. 20 per dozen. Find his profit or loss.

Solution:

Now here, the total selling price is more than that total cost Price. So, Shopkeeper made a profit.

Marked Price:

To avoid the loss due to bargaining by the customer and to get Profit.

Seller increases the cost price. This increase in value over the cost price is known as mark up and increased price is known as marked price or printed price or labeled price or Listed price.

Generally, goods are sold at marked price. If there is no further discount, then for that case selling price equals to marked price.

Discount:

Discount means the reduction of marked price to sell at a lower rate.

Discount always carried on marked price.

Example 5

If the cost price of an article is Rs. 400 and mark up is 25%. Then find the marked price.

Solution:

 So, the marked price is 500 Rs.

Example 6

If the mark-up percentage of an article is 30% and the discount percentage is also 20%. Then find the profit or loss percentage.

Solution:

See the best technique to solve this type of problem

Let us assume Cost Price 100 Rs.

Then marked price is (100 + 30) % of 100 Rs.

= 130 Rs.

Now there is a discount of 20%

We know discount is always given on marked price.

So, the discount is 20% of 130 Rs.

= 26 Rs.

Now Selling Price is (130 - 26) Rs.

= 104 Rs.

Now, Selling Price > Cost Price

So, there is Profit.