Profit and Loss Basic Concepts
Profit and Loss Basic Concepts
Profit and Loss Basic Concepts
Profit and Loss formula is used in mathematics to determine the price of a commodity in the
market and understand how profitable a business is. Every product has a cost price and selling
price. Based on the values of these prices, we can calculate the profit gained or the loss incurred
for a particular product. The important terms covered here are cost price, fixed, variable and
semi-variable cost, selling price, marked price, list price, margin, etc. Also, we will learn
the profit and loss percentage formula here.
For example, for a shopkeeper, if the value of selling price is more than the cost price of a
commodity, then it is a profit and if the cost price is more than the selling price, it becomes a
loss. Here, in this article, we will discuss profit as well as loss concepts along with tricks to solve
problems based on it.
Table of Contents:
Concepts
o Profit
o Loss
o Cost Price
o Selling Price
o Marked Price
Formula
Examples
Tricks
Solved Problems
Profit(P)
The amount gained by selling a product with more than its cost price.
Loss(L)
The amount the seller incurs after selling the product less than its cost price, is mentioned as a
loss.
Cost Price (CP)
The amount paid for a product or commodity to purchase it is called a cost price. Also, denoted
as CP. This cost price is further classified into two different categories:
Fixed Cost: The fixed cost is constant, it doesn’t vary under any circumstances
Variable Cost: It could vary depending as per the number of units
The profit or gain is equal to the selling price minus cost price.
Loss is equal to cost price minus selling price.
Profit or Gain = Selling price – Cost Price
Loss = Cost Price – Selling Price
The formula for the profit and loss percentage is:
Profit
Profit Loss Percentage Formula
Important Questions For Class 7 Maths
Important Questions Class 8 Maths
Solved Problems
Q. 1: Suppose a shopkeeper has bought 1 kg of apples for 100 rs. And sold it for Rs. 120 per
kg. How much is the profit gained by him?
Solution:
Cost Price for apples is 100 rs.
Selling Price for apples is 120 rs.
Then profit gained by shopkeeper is ; P = SP – CP
P = 120 – 100 = Rs. 20/-
Q.2: For the above example calculate the percentage of the profit gained by the
shopkeeper.
Solution:
We know, Profit percentage = (Profit /Cost Price) x 100
Therefore, Profit percentage = (20/100) x 100 = 20%.
Q.3: A man buys a fan for Rs. 1000 and sells it at a loss of 15%. What is the selling price of
the fan?
Solution: Cost Price of the fan is Rs.1000
Loss percentage is 15%
As we know, Loss percentage = (Loss/Cost Price) x 100
15 = (Loss/1000) x 100
Therefore, Loss = 150 rs.
As we know,
Loss = Cost Price – Selling Price
So, Selling Price = Cost Price – Loss
= 1000 – 150
Selling Price = R.850/-
Q.4: If a pen cost Rs.50 after 10% discount, then what is the actual price or marked price
of the pen?
Solution: MP x (100 – 10) /100 = 50
MP x (90/100) = 50
MP = (50 x 100)/90
MP = Rs. 55.55/-
Points to remember:
For-profit, the selling price should be more than the cost price
For loss, cost price should be more than the selling price.
The percentage value for profit and loss is calculated in terms of cost price.
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