PROFIT AND LOSS
Mr Gupta makes very good rocking chairs. It coast him Rs. 795 to make one rocking chair. He sells it in his furniture shop at Rs. 900.
Rs. 795 is the Cost Price (CP) of the chair.
Rs. 900 is the Selling Price (SP) of the chair.
Since he sells it for more than it costs to make, he earn money by doing so. This is called his profit.
Rs. 900 SP
Rs. – 795 CP
Rs. 105 Profit
Formula to calculate profit → SP – CP = Profit
There is one rocking chair with a small scratch on it. Mr Gupta sells this particular chair for Rs. 715. Since he sells it for less than what it costs him to make it, he loses money on the sale. This is called his loss.
Rs. 795 CP
Rs. – 715 SP
Rs. 80 Loss
Formula to calculate Loss → CP – SP = Loss
- When SP > CP the difference (SP – CP) is Profit.
- When SP < CP the difference (CP – SP) in Loss.
Mr Gupta delivered one rocking chair to another town. It costs him Rs. 105 to do so. The cost price of this particular chair is now Rs. 975 + Rs. 105 = Rs. 900. If he sell this chair at Rs. 1000 what is his profit or loss on the chair?
SP = Rs. 1000
CP = Rs. 900
Comparing the SP and CP, we see that SP > CP , so there is a profit.
SP – CP = Profit
1000 – 900 = 100
Mr Gupta makes a profit of Rs. 100 on the chair.
Finding Cost Price
Ramu bought apples from a farmer and sold them in the market. He sells them at Rs. 70 for a kilo and makes a profit of Rs. 23 on each kilo. How much did Ramu pay per kilo apples?
He also bought oranges from the farmer. He sold them in the market at Rs. 95 per dozen. This was at a loss of Rs. 12 per dozen. What did 1 dozen oranges cost him?