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Thought-Process to Discover Knowledge

Welcome to nubtrek.

Books and other education websites provide "matter-of-fact" knowledge. Instead, nubtrek provides a thought-process to discover knowledge.

In each of the topic, the outline of the thought-process, for that topic, is provided for learners and educators.

Read in the blogs more about the unique learning experience at nubtrek.continue
mathsCommercial ArithmeticsConsumer Sales Business

Introduction to Profit and Loss

This page introduces the terms cost-price, sale-price, overhead-expenses, profit, and loss. It explains that the shopkeeper invested cost-price and so profit is calculated as a percent of the amount invested.

Profit percent `= 100 xx` (sale price - cost price) `//` cost price.



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A person buys a pen from a shop for `20` coins. The pen was manufactured by a company and sold to the shopkeeper. Why does the shopkeeper buy pens from a company and sell to customers?

  • Shopkeeper makes money for his living
  • Shopkeeper makes money for his living
  • Shopkeeper does service for fun

The answer is "Shopkeeper makes money for his living".

For example, Shopkeeper buys a pen for `18` coins from the company that makes pens. She sells the pen for `20` coins. The difference of `2` coins is what she earns. This amount is called the profit.

Which of the following is a meaning for the word "profit"?

  • gain; financial benefit
  • gain; financial benefit
  • professional fitness

The answer is "gain; financial benefit".

What is the term used to refer "financial gain"?

  • Pronunciation : Say the answer once
    Spelling: Write the answer once

The answer is "profit".

Profit : Financial gain in a business is called the profit.

Shopkeeper buys a pen for `18` coins from the company that makes pens. Due to some reasons, over next 6 months, a new variety of pen became popular and customers do not like to buy the earlier pen. So the shop keeper reduces the price of the pen to attract a buyer and sells the pen for `15` coins. The difference of `3` coins is what she lost in this business. This amount is called the loss.

Which of the following is a meaning for the word "loss"?

  • not tight; detached and not held together
  • amount that is taken away or lost
  • amount that is taken away or lost

The answer is "amount that is taken away or lost".

What is the term used to refer "amount that is lost"?

  • Pronunciation : Say the answer once
    Spelling: Write the answer once

The answer is "loss".

Loss : Amount that is lost in a business is called the loss.

A shopkeeper sells a pen for `18` coins to a customer. Which of the following describe the shopkeeper?

  • seller
  • seller
  • buyer

The answer is "seller"

A shopkeeper sells a pen for `18` coins to a customer. Which of the following describe the customer?

  • seller
  • buyer
  • buyer

The answer is "buyer"

A shopkeeper buys a pen for `18` coins. She has paid the amount and it is the investment made. Which of the following describe the amount paid?

  • cost-price
  • cost-price
  • sale-price

The answer is "cost-price"

Which of the following is a meaning for the phrase "cost price"?

  • the amount paid by the seller in buying from manufacturer
  • the amount paid by the seller in buying from manufacturer
  • the amount paid by the buyer while buying from shopkeeper

The answer is "the amount paid by the seller".

What is the term used to refer "the amount paid by the seller"?

  • Pronunciation : Say the answer once
    Spelling: Write the answer once

The answer is "cost-price".

Cost Price : The original price paid by the seller to procure an item is the cost price of the item.

A shopkeeper sells a pen for `20` coins to a buyer. The buyer has paid the amount and bought the pen. Which of the following describe the amount paid?

  • cost-price
  • sale-price
  • sale-price

The answer is "sale-price"

Which of the following is a meaning for the phrase "sale price"?

  • the amount paid for an item by the seller to procure
  • the amount received for an item by the seller in a sale
  • the amount received for an item by the seller in a sale

The answer is "the amount received for an item by the seller in a sale".

What is the term used to refer "the amount received for an item by the seller in a sale"?

  • Pronunciation : Say the answer once
    Spelling: Write the answer once

The answer is "sale-price".

Sale Price : The amount received for an item is the sale price of the item.

The profit or loss is usually given as a percentage. Let us consider a pen

• The cost price of pen is `40` coins.

• The sale price of the pen is `48` coins.

• The profit in the sale is `8` coins. To provide the profit as percentage, one of the following is used.

• The profit of `8` as percent of cost price `40` coins `=8/40 xx 100` percent

• The profit of `8` as percent of sale price `48` coins `=8/48 xx 100` percent

Which one of the above is the sensible choice to specify profit percentage?

  • profit as percent of cost price
  • profit as percent of sale price
  • profit as percent of sale price

The answer is "profit as percent of cost price".

The seller makes the profit on the amount he/she invested. The amount invested is the cost price. So the profit percent is given as a percent of cost price.

Profit Percent : The profit as a percent of the cost-price is the profit percentage.
Profit percent `= 100 xx` (sale price - cost price) `//` cost price.

Loss Percent : The loss as a percent of the cost-price is the loss percentage.
Loss percent `= 100 xx` (cost price - sale price) `//` cost price.

A shopkeeper gets a pen for `40` coins and spends `3` coins per pen in transporting the pen to the shop and in other expenses. (some of the other expenses are, the rent for the shop, the salaries for workers, the electricity, etc.)

Which of the following is an appropriate term to refer to the `3` coins spent?

  • overhead expenses
  • overhead expenses
  • extra money

The answer is "overhead expenses"

Which of the following is a meaning for the word "overhead expenses"?

  • above the level of cost-price
  • above the level of cost-price
  • heating a small field

The answer is "above the level of cost-price".

What is the term used to refer "expenses above the level of cost-price"?

  • Pronunciation : Say the answer once
    Spelling: Write the answer once

The answer is "overhead expenses".

Overhead Expense : The expenses incurred in the shop on an item over the cost-price of the item is the overhead expenses.

                            
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