Page 108 - New Medley 5 Semester 2

3 Profit/Loss and Bills Competencies

C-4.1, C-4.2, C-4.3 , C-5.1

In daily life we have often heard about words like profit, loss, bill, etc.
Now we shall learn about them.

We shall also learn how to calculate profit and loss and how to make bills
for purchases.

Profit and Loss

Here, we recall what we learnt in the previous class through an example.

A retailer buys a refrigerator for `9550 from a wholesaler and pays `150
for transportation. Then, he sells the refrigerator for `10500 to a customer.

In this business, cost price of the refrigerator = `9550

Overhead expense (transporting cost) = `150

\ Total cost price = `9550 + `150 = `9700

Selling price of the refrigerator = `10500

Since Selling price (S.P.) > Cost price (C.P.) Overhead expense
is a part of the cost
So, the retailer has a profit from this sale. price.

And Profit = S.P. – C.P.
= `10500 – `9700 = `800

What happened if the selling price were `9500 only.

In that case, S.P. < C.P., so there is a loss.

And Loss = C.P. – S.P.

= `9700 – `9500 = `200

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