PROFIT & LOSS
Profit and Loss are part and parcel of every commercial transaction. In fact, the entire economy and the concept of capitalism is based on the so called ”Profit Motive”.
Profit and Loss in Case of Individual Transactions
We will first investigate the conept of Profit and Loss in the case of individual transactions. Certain concepts are important in such transaction. They are:
Ex.1 A man buys a shirt and a trouser for Rs. 371. If the trouser costs 12% more than the shirt, find the cost of the shirt.
Sol. Here, we can write the equation:
S + 1.12s = 371 ® s = 371/2.12 (however, this calculation is not very easily done)
An alternate approach will be to go through options. Suppose the option are
(A) Rs. 125 (B) Rs. 150
(C) Rs. 175 (D) Rs. 200
Checking for, say, Rs. 150, the thought process should go like:
Let s = cost of a shirt
If s = 150, 1.12s will be got by increasing s by 12% i.e. 12% of 150 = 18. Hence the value of 1.12s = 150 + 18 = 168
and s + 1.12 s = 318 is not equal to 371. Hence check the next higher option.
If s = 175. 1.12s = s + 12% of s = 175 + 21
= 196 i.e. 2.12 s = 371.
Hence, the option is correct.
ASSIGNMENT
1. By selling a watch for Rs. 495, a shopkeeper incurs a loss of 10%. Find the cost price of the watch for the shopkeeper.
(A) Rs. 545 (B) Rs. 550 (C) Rs. 555 (D) Rs. 565
(E) None of these
2. By selling a cap for Rs. 34.40, a man gains 7.5%. What will be the CP of the cap ?
(A) Rs. 32.80 (B) Rs. 32
(C) Rs. 32.40 (D) Rs. 28.80
(E) Rs. 31.40
3. A cellular phone when sold for Rs. 4600 fetches a profit of 15%. Find the cost price of the cellular phone.
(A) Rs. 4300 (B) Rs. 4150
(C) Rs. 4000 (D) Rs. 4500
(E) Rs. 4400
4. A machine costs Rs. 375. If it is sold at a loss of 20%, what will be its costprice as a percentage of its selling price ?
(A) 80% (B) 120%
(C) 110% (D) 125%
(E) None of these
5. A shopkeeper sold goods for Rs. 2400 and made a profit of 25% in the process. Find his profit per cent if he had sold his goods for Rs. 2040.
(A) 6.25% (B) 7% (C) 6.20% (D) 6.5%
(E) 6.75
6. How much percent more than the cost price should a shopkeeper mark his goods, so that after allowing a discount of
12/5% he should have a gain of 5% on his outlay ?
(A) 9.275 % (B) 16.66%
(C) 20% (D) 25%
(E) 33.33%
7. In order to maintain the price line, a trader allows a discount of 10% on the marked price of goods in his shop. However, he
still makes a gross profit of 17% on the cost price. Find the profit per cent he would have made on the selling price had he sold at the marked price.
(A) 23.07% (B) 30% (C) 21.21% (D) 25%
(E) 40%
8. A whole-seller allows a discount of 20% on the list price to a retailer. The retailer sells at 5% discount on the
list price. If the customer paid Rs. 38 for an article, what profit is made by the retailer ?
(A) Rs. 10 (B) Rs. 8 (C) Rs. 6 (D) Rs. 12
(E) None of these
9. In question 23, find also the retailer’s percentage profit on his cost giving your answer correct to two decimal places.
(A) 12.5% (B) 16.66%
(C) 18.75% (D) 20%
(E) 25%
10. The cost of production of a cordless phone set in 2006 is Rs. 900, divided between material, labour and overheads in the ratio
3 : 4 : 2. If the cordless phone set is marked at a price that gives a 20% profit on the component of price accounted for by labout ,what is the marked price of the set ?
(A) Rs. 980 (B) Rs. 1080
(C) Rs. 960 (D) Rs. 1020
(E) None of these
11. A watch dealer pays 10% custom duty on a watch that costs Rs. 250 abroad. For how much should he mark it,
if he desires to make a profit of 20% after giving a discount of 25% to the buyer ?
(A) Rs. 400 (B) Rs. 440
(C) Rs. 275 (D) Rs. 330
12. A shopkeeper buys an article for Rs. 400 and marks it for sale at a price that gives him 80% profit on his cost. He, however,
gives a 15% discount on the marked price to his customer. Calculate the actual percentage profit made by the shopkeeper.
(A) 62% (B) 64%
(C) 53% (D) 54%
13. In the land of the famous milkman Merghesse durian, a milkman sells his buffalo for Rs. 720 at some profit. Had he sold his
buffalo at Rs. 510, the quantum of the loss incurrent would have been double that of the profit earned. What is the cost price ?
(A) Rs. 600 (B) Rs. 625
(C) Rs. 675 (D) None of these
14. A trader purchases aples at Rs. 60 per hundred. He spends 15% on the transportaion. What should be the selling price per 100 to earn a profit of 20% ?
(A) Rs. 72 (B) Rs. 81.8
(C) Rs. 82.8 (D) Rs. 83.8
15. A dishonest dealer professes to sell at cost price but uses a 900 gram weight instead of a 1 Kilogram weight. Find the percent profit to the dealer.
(A) 10% (B) 11.11%
(C) 12.5% (D) None of these
Directions for Question 16 – 17 : Answer questions based on this additional information :
Mr. Vikas Verma owns a fleet of 3 taxis, where he pays his driver Rs. 3000 per month. He also insists on keeping an attendant for Rs. 1500
per month in each of his taxis. Idling requires 50 ml of fuel for every minute of idling. For a moving taxi, the fuel consumption is given by 12 km/per litre.
On a particular day, he received the following reports about the three taxis.
16. The maximum revenue has been generated by which taxi ?
(A) A (B) B
(C) C (D) A & B
(E) Cannot be determined
If it is to be assumed that every customer travelled at least 2 kilometres :
17. Which of the three taxis generated the maximum revenue ?
(A) A (B) B
(C) C (D) Both A & B
(E) Cannot be determined
18. What percentage of the total revenue was generated by taxi B ?
(A) 32.30 (B) 33.36
(C) 34.32 (D) 34.36
(E) None of these
19. The highest profit was yielded by which taxi ?
(A) A (B) B
(C) C (D) Both A & B
(E) Cannot be determined
20. The taxi which had the highest percentage profit for the day was
(A) A (B) B
(C) C (D) B & C
(E) Cannot be determined
21. The profit as a percentage of costs for the day was :
(A) 179.46% (B) 150.76%
(C) 163.28% (D) 173.48%
(E) Cannot be determined
ANSWER KEY
1) B 2) B 3) C 4) D 5) A 6) C 7) B 8) C 9) C 10) A 11) B
12) C 13) D 14) C 15) B 16) E 17) C 18) B 19) C 20) A 21) B