The situations described in this topic are from the point of view of the person selling something to someone else, for instance a Store Owner.
The 'cost price' is how much the item cost the shop owner. The 'selling price' is what he is selling the item for.
If the shop owner sells an item for more than he paid for it, then the difference is the 'profit'; ie. PROFIT = SELLING PRICE - COST PRICE. Profit is often expressed as a percentage of the cost price. This is called the Percentage profit. PERCENTAGE PROFIT = (PROFIT/COST PRICE) * 100%
If the shop owner sells an item for less than he paid for it, then the difference is the 'loss'; ie. LOSS = COST PRICE - SELLING PRICE. Loss is often expressed a percentage of the cost price. This is called the Percentage loss. PERCENTAGE LOSS = (LOSS/COST PRICE) * 100%
NB.: Both Profit and Loss can be expressed either in dollars or as a percentage of the Cost price.
● A Cost price is the amount of money an item is BOUGHT for.
●A Selling price is the amount of money an item is SOLD for.
● If an article is sold for more than it cost, then it is said to have been sold at a PROFIT.
● If an article is sold for less than it cost, then it is said to have been sold at a LOSS.
You will be required to attempt the following questions in your notebooks.
Question 1: A shopkeeper buys scientific calculators in bulk for $15 each. He sells them for $40 each.
a) Was there a profit or loss made by the shopkeeper?
b) Calculate the profit/loss on each calculator in dollars, and as a percentage of the cost price.
Question 2: A school bookshop sells an outdated Biology textbook for $49.25, making a loss of 5%.
a) What was the cost price of the book.
b) What is the cash value of the loss?
Question 3: Give definitions for the terms Cost price, Selling price, Profit and Loss.