This topic is a pure application of Unitary method. Every trader does business in order to make profits.
☛ The cost at which he buys goods is known as ‘Cost Price’. If he is making a product with raw materials purchased, all the cost incurred in making the final product is ‘cost Price’ (C.P).
☛ The price at which he sells the product is known as ‘Selling Price’ (S.P).
☛ In transactions where
S.P > C.P , he makes ‘profit’
☛ Transactions where
C.P > S.P, he makes ‘loss’.
☛ Profit = S.P – C.P
☛ Loss = C.P – S.P
Eg. A trader buys cups from a manufacturer at Rs. 100 and sold it for Rs. 120 to his customer. Did he gain or lose in this transaction?
Here, CP = Rs.100
S.P = Rs. 120
S.P > C.P. Therefore the trader has made a profit.
Profit = Rs. 120 – Rs.100
= Rs. 20
☛ Profit % and Loss % are always calculated by taking C.P as the base.
Profit % = Profit /C.P x 100
Loss % = Loss/C.P x 100
In the previous example, the profit was Rs. 20 on a base (investment) of Rs.100.
Profit % = 20/100x 100 = 20%
Depending on outcome of the transaction,
S.P = C.P + Profit or
S.P = C.P – Loss
Eg. A vegetable seller bought vegetables for Rs. 1800 from the market. After selling all the vegetables, he was left with Rs. 700 profit. Calculate the S.P
C.P = Rs. 1800.
Profit = Rs. 700
S.P = Profit + C.P
= Rs. 1800+ Rs.700
Finding S.P with Profit/ Loss % and C.P
Many a times, we may have only Profit % and Cost Price, with which we may have to find the Selling Price.
Eg. Let us say, a man makes profit of 5% on C.P of Rs. 1200. What is the selling price?
As we know, profit is always calculated with CP as the base.
If the profit is 5%, it means that, for a C.P of every Rs. 100, he makes Rs. 5 profit.
Thus for every Rs. 100 as C.P, Rs. 105 is S.P
When C.P is Rs. 1200, What will be S.P? – Application of Unitary method
Hence, S.P = 1200/100*105
= Rs. 1260
Eg. Let us say a man made a loss of 20% on articles bought for Rs. 1500. What would the selling price?
Applying a similar approach as above, for a C.P of Rs. 100, man made a loss of Rs. 20.
S.P = Rs. 80 when C.P= Rs. 100
When C.P = Rs.1500,
S.P = 80/100 X 1500
When we go to a shop, discount is one thing everyone keeps looking for.
It is nothing but the difference between the price originally quoted by shopkeeper (Marked Price) and the final price you buy it for (Selling Price).
= Marked Price – Selling price
Discount is always applied considering Marked Price as the base.
=Discount/Marked Price x 100
Eg. If a product’s Marked Price is Rs.200 and 30% is the discount given, then the object is sold for Rs.30 discount.
Discount = 30 / 200 x 100
Hence, Discount = Rs. 60
Thus, Product was sold for Rs.140
Eg. A shopkeeper gave a discount of 10% but still managed to make a profit of 20% over Cost Price of Rs. 3000. What was the marked price of the product?
The cost price of product is Rs. 3000.
Profit % = 20%
Profit = 20/100 x 3000 = Rs. 600
S.P = Rs. 3000+ Rs.600
Discount % = 10 %
It means that if the marked price is Rs. 100, the discount is Rs. 10 and the Selling price is Rs. 90.
Here SP = Rs.3600, therefore,
C.P = 3600/90 x 100
= Rs. 4000.
People invest in business to make profits. When two or more people invest in a business, it is known as ‘Partnership’.
Whenever a profit is made by a business, amount invested and duration for which the amount was invested dictates the ratio in which profit is shared by the partners.
Profit ( directly proportional ) Investment
Profit (directly proportional) Time for which investment is done.
P1 – Profit by 1st Person
I1 – Investment by 1st person
T1– Time for which money was invested by 1st person
P2 – Profit by 2nd Person
I2 – Investment by 2nd person
T2 – Time for which money was invested by 1st person
Eg. A and B entered into a partnership where A invested Ra.300 for first 3 months and Rs. 600 for next 9 months. On the other hand, B invested Rs.500 for the entire year. In what ratio will their profit of Rs. 820 be divided?
If the profit was Rs.41, A would receive Rs. 21 and B would receive Rs.20.
When profit is Rs.820, A will receive 820/41 x 21 = Rs. 420 and B will receive Rs. 400.