Profit And Losses
This document was uploaded by user and they confirmed that they have the permission to share it. If you are author or own the copyright of this book, please report to us by using this DMCA report form. Report DMCA
Overview
Download & View Profit And Losses as PDF for free.
More details
- Words: 817
- Pages: 17
Loading documents preview...
BU YING AND SE LL ING
PROFITS AND LOSSES
OBJECTIVES At the end of the lesson, you will learn to • Differentiate profit from loss • Illustrate how profit is obtained and how to avoid loss in a given transaction • Determine the break-even point • Solve problems involving buying and selling
PROFIT It is what rains of the selling price (sales) after all costs and expenses had been deducted.
COST means the cost of the product sold or service rendered.
EXPENSES refer to operating expenses (interest and other finance charges).
LOSS It occurs when the cost and expenses exceed the selling price or sales.
Determining the profit or loss involves a simple addition and subtraction. The revenue is a plus item. All expenses are minus items and, therefore, deducted from the revenue. The result is a profit if it is positive and loss if it is negative.
EXAMPLE 1. A watch store owner decided to offer a 20% discount for a particular brand of watch which sells at ₱35,000. By doing so, his average sales increased from 5 watches to 12 watches a day. If he bought one watch at a price of ₱22,000 from the supplier, by how much was the daily profit increased or decreased by offering such
SOLUTION:
discount on the watch?
WE COMPUTE FOR THE DAILY PROFIT BEFORE AND AFTER THE DISCOUNT WAS OFFERED. WITHOUT DISCOUNT, PROFIT PER WATCH =35,000-22,000= ₱13,000 PROFIT FOR SELLING 5 WATCHES =13,000 ×5=₱65,000
EXAMPLE 1. A watch store owner decided to offer a 20% discount for a particular brand of watch which sells at ₱35,000. By doing so, his average sales increased from 5 watches to 12 watches a day. If he bought one watch at a price of ₱22,000 from the supplier, by how much was the daily profit increased or decreased by offering such discount on the watch?
SOLUTION:
WITH 20% DISCOUNT, NEW SELLING PRICE =35,000-0.2(35,000)= ₱28,000 PROFIT PER WATCH =28,000-22,000= ₱6,000 PROFIT FOR 12 WATCHES 6,000 ×12= ₱72,000 INCREASE IN DAILY PROFIT =72,000-65,000= ₱7,000
Sometimes, a businessman experiences loss because of mismanagement, unfavorable market conditions, change in trends for fashionable goods, poor economic situation, unsold perishable goods, release of new and advanced models for appliance and electronic gadgets, and a lot more. The examples below describe such conditions.
EXAMPLE 2. Annie bought one dozen of smart phones for ₱200,000 with a discount of 5%. Half dozen were sold at a price of ₱18,000 per unit. However, a new model of smart phones became available in the market, so she sold the remaining half dozen at ₱12,000 each unit. What was her profit or loss?
SOLUTION: COST OF 12 DOZENS OF SMART PHONES =200,000-0.05 (200,000)= ₱190.000
EXAMPLE 2. Annie bought one dozen of smart phones for ₱200,000 with a discount of 5%. Half dozen were sold at a price of ₱18,000 per unit. However, a new model of smart phones became available in the market, so she sold the remaining half dozen at ₱12,000 each unit.
SOLUTION:
What was her profit or loss?
NET SALES: FOR 6 SMART PHONES AT A PRICE OF ₱18,000 PER PIECE =18,000 ×6= ₱108,000 FOR 6 REMAINING PHONES AT A PRICE OF ₱12,000 PER PIECE =12,000 ×6= ₱72,000 TOTAL NET SALES =108,000+72,000=₱180,000
EXAMPLE 2. Annie bought one dozen of smart phones for ₱200,000 with a discount of 5%. Half dozen were sold at a price of ₱18,000 per unit. However, a new model of smart phones became available in the market, so she sold the remaining half dozen at ₱12,000 each unit.
SOLUTION:
What was her profit or loss?
LOSS ="COST – NET SALES = 190,000 – 180,000 = " ₱10,000
EXAMPLE 3. Jay-R bought two digital cameras at 15,490 each. He sold one of the cameras to his friend at 13,500, while the other one was sold to his neighbor at 16,200. How muchis Jay-R’s profit or loss?
SOLUTION: COST OF 2 DIGITAL CAMERAS =15,490 × 2= ₱30,980 NET SALES =13,500+16,200= ₱29,700 LOSS ="COST – NET SALES = 30,980 – 29,700 = " ₱1,280
EXAMPLE 4. Michelle went to Baguio and bought 20 jars of strawberry jam for ₱3,500 with 15% discount. When she got back to Manila, she sold 10 of the jams for a total of ₱1,800, and the rest at ₱185 each. How much profit did Michelle gain?
SOLUTION: COST OF THE 20 JARS OF STRAWBERRY JAM =3,500- 0.15(3,500)= ₱2,975 NET SALES: FIRST 10 JARS = ₱1,800 REMAINING 10 JARS =185 ×10= ₱1,850 TOTAL NET SALES = ₱3,650
Sometimes when an item is given a selling price where the profit ends up being zero, this is said to be the BREAK-EVEN PRICE. In this case, the selling price is simply equal to the total cost price and the operating expenses
BREAK-EVEN PRICE = COST PRICE + OPERATING COST BEP = C + E WHERE BEP = BREAK-EVEN PRICE C = COST PRICE E = OPERATING EXPENSES
PROFITS AND LOSSES
OBJECTIVES At the end of the lesson, you will learn to • Differentiate profit from loss • Illustrate how profit is obtained and how to avoid loss in a given transaction • Determine the break-even point • Solve problems involving buying and selling
PROFIT It is what rains of the selling price (sales) after all costs and expenses had been deducted.
COST means the cost of the product sold or service rendered.
EXPENSES refer to operating expenses (interest and other finance charges).
LOSS It occurs when the cost and expenses exceed the selling price or sales.
Determining the profit or loss involves a simple addition and subtraction. The revenue is a plus item. All expenses are minus items and, therefore, deducted from the revenue. The result is a profit if it is positive and loss if it is negative.
EXAMPLE 1. A watch store owner decided to offer a 20% discount for a particular brand of watch which sells at ₱35,000. By doing so, his average sales increased from 5 watches to 12 watches a day. If he bought one watch at a price of ₱22,000 from the supplier, by how much was the daily profit increased or decreased by offering such
SOLUTION:
discount on the watch?
WE COMPUTE FOR THE DAILY PROFIT BEFORE AND AFTER THE DISCOUNT WAS OFFERED. WITHOUT DISCOUNT, PROFIT PER WATCH =35,000-22,000= ₱13,000 PROFIT FOR SELLING 5 WATCHES =13,000 ×5=₱65,000
EXAMPLE 1. A watch store owner decided to offer a 20% discount for a particular brand of watch which sells at ₱35,000. By doing so, his average sales increased from 5 watches to 12 watches a day. If he bought one watch at a price of ₱22,000 from the supplier, by how much was the daily profit increased or decreased by offering such discount on the watch?
SOLUTION:
WITH 20% DISCOUNT, NEW SELLING PRICE =35,000-0.2(35,000)= ₱28,000 PROFIT PER WATCH =28,000-22,000= ₱6,000 PROFIT FOR 12 WATCHES 6,000 ×12= ₱72,000 INCREASE IN DAILY PROFIT =72,000-65,000= ₱7,000
Sometimes, a businessman experiences loss because of mismanagement, unfavorable market conditions, change in trends for fashionable goods, poor economic situation, unsold perishable goods, release of new and advanced models for appliance and electronic gadgets, and a lot more. The examples below describe such conditions.
EXAMPLE 2. Annie bought one dozen of smart phones for ₱200,000 with a discount of 5%. Half dozen were sold at a price of ₱18,000 per unit. However, a new model of smart phones became available in the market, so she sold the remaining half dozen at ₱12,000 each unit. What was her profit or loss?
SOLUTION: COST OF 12 DOZENS OF SMART PHONES =200,000-0.05 (200,000)= ₱190.000
EXAMPLE 2. Annie bought one dozen of smart phones for ₱200,000 with a discount of 5%. Half dozen were sold at a price of ₱18,000 per unit. However, a new model of smart phones became available in the market, so she sold the remaining half dozen at ₱12,000 each unit.
SOLUTION:
What was her profit or loss?
NET SALES: FOR 6 SMART PHONES AT A PRICE OF ₱18,000 PER PIECE =18,000 ×6= ₱108,000 FOR 6 REMAINING PHONES AT A PRICE OF ₱12,000 PER PIECE =12,000 ×6= ₱72,000 TOTAL NET SALES =108,000+72,000=₱180,000
EXAMPLE 2. Annie bought one dozen of smart phones for ₱200,000 with a discount of 5%. Half dozen were sold at a price of ₱18,000 per unit. However, a new model of smart phones became available in the market, so she sold the remaining half dozen at ₱12,000 each unit.
SOLUTION:
What was her profit or loss?
LOSS ="COST – NET SALES = 190,000 – 180,000 = " ₱10,000
EXAMPLE 3. Jay-R bought two digital cameras at 15,490 each. He sold one of the cameras to his friend at 13,500, while the other one was sold to his neighbor at 16,200. How muchis Jay-R’s profit or loss?
SOLUTION: COST OF 2 DIGITAL CAMERAS =15,490 × 2= ₱30,980 NET SALES =13,500+16,200= ₱29,700 LOSS ="COST – NET SALES = 30,980 – 29,700 = " ₱1,280
EXAMPLE 4. Michelle went to Baguio and bought 20 jars of strawberry jam for ₱3,500 with 15% discount. When she got back to Manila, she sold 10 of the jams for a total of ₱1,800, and the rest at ₱185 each. How much profit did Michelle gain?
SOLUTION: COST OF THE 20 JARS OF STRAWBERRY JAM =3,500- 0.15(3,500)= ₱2,975 NET SALES: FIRST 10 JARS = ₱1,800 REMAINING 10 JARS =185 ×10= ₱1,850 TOTAL NET SALES = ₱3,650
Sometimes when an item is given a selling price where the profit ends up being zero, this is said to be the BREAK-EVEN PRICE. In this case, the selling price is simply equal to the total cost price and the operating expenses
BREAK-EVEN PRICE = COST PRICE + OPERATING COST BEP = C + E WHERE BEP = BREAK-EVEN PRICE C = COST PRICE E = OPERATING EXPENSES
Related Documents
Profit And Losses
February 2021 0
Ppt10-profit And Loss
February 2021 1
Profit And Loss. 45
March 2021 0
Profit Loss Profit Loss
January 2021 1
Reduction Of Cost And Losses Of Transformer
March 2021 0
Mas.1416 Profit Planning And Cvp Analysis
January 2021 0More Documents from "Charry Ramos"
Profit And Losses
February 2021 0
O_velho_gra_a_uma_biografia_de_graciliano_ramos_d_.pdf
February 2021 0
