What is Profit and Loss
People do various kinds of job to earn money. Shopkeeper sell article that people need. They buy things from wholesale traders in large confinities at lower rates. If cost less than the printed price when they sale things in retail,
i.e, In smaller quantities, they charge a greater amount. If the selling price is more than the amount paid for it, there is a gain. It is called Profit. Sometimes, an article is sold for the less than the amount paid for it while buying the damage, in that case is called Loss.
If the selling price is less than the cost price, there is loss.
Loss = Cost Price – Selling Price
If selling is more than the cost price then there is Profit
Profit = Selling Price – Cost Price
Profit and Loss Formula
If the selling price and cost price of a product is given, then the formula for finding the profit or loss is applied. The profit formula is used when the selling price of an item is higher than the cost price of that item. It is mentioned below.
Profit = Selling price (S.P.) – Cost price (C.P.)
The loss formula is used when the cost price of an item is higher than the selling price of that item. It is mentioned below.
Loss = Cost price (C.P.) – Selling price (S.P.)
In some cases or as per the need of the given questions, the calculated profit or loss is converted into a percentage. The percentage of profit and loss tells the amount of profit earned or loss incurred in the form of a percentage. It also assists in the comparisons of two given quantities. The formulas for profit and loss percentages are mentioned below.
1. Profit percentage (P%) = (Profit /Cost Price) × 100
2. Loss percentage (L%) = (Loss / Cost price) × 100
3. S.P. = {(100 + P%) / 100} × CP (if SP > CP)
4. S.P. = {(100 – L%) / 100} × CP (if SP < CP)
5. C.P. = {100 / (100 + P%)} × SP (if SP > CP)
6. C.P. = {100 / (100 – L%)} × SP (if SP < CP)
Profit and Loss Examples
a) 1%
b) 2%
c) 3%
d) 4%
Answer: Option D
Explanation:
So we have C.P. = 27.50
S.P. = 28.60
Gain = 28.60 – 27.50 = Rs. 1.10
a) 100
b) 250
c) 200
d) 124
Ans : C
Explanation:
He bought bananas for rupees 1000
Hence,
Cost Price = 1000
Selling Price = 800
Cost Price is Greater than selling price. Therefore, Suraj suffer a loss.
Loss = Cost Price – Selling Price
Loss = 1000 – 8000
= 200
hence Suraj suffered loss of Rs. 200 in this transaction.
a) 2100
b) 1900
c) 2020
d) 2000
Ans: D
Explanation:
The cost price of 500 kg rice is Rs.22000.
Selling Price of 500 kg of rice is = 500 * 48 = Rs. 24000
Selling priceis greater than cost price.
Therefor, there is a profit.
Profit = Selling Price – Cost Price
24000 – 22000
=2000
In This Transaction, Ran made a profit of Rs. 2000.
a) 100
b) 450
c) 100
d) 500
Answer: d
Explanation:
Hence,
Cost Price= 2000, Selling Price = 2500
Selling price is the greater than the Cost Price.
Therefore, there is profit.
Profit = Selling Price – Cost Price
= 2500 – 2000
= 500
a) 10000
b) 12600
c) 12800
d) 11458
Answer: c
Explanation:
Total expenses while buying the machine
= Cost of machine + Octroi + Transport + Porterage
= 75000 + 1500 + 600 + 100
= Rs. 77200
That is Total cost price is Rs. 77200
Profit = Selling Price – Total Cost Price
=90000 – 77200
= Rs. 12800
Sudha Made Profit of 12800 in this transaction