Mrs. Rosa P.

Garello
Cagayan National High School
Tuguegarao City
1
 BUSINESS MATHEMATICS

TOPIC: BUYING AND SELLING

SPECIFIC OBJECTIVES:
At the end of the lesson, the
students should be able to:
define cost price, operating
expenses,
profit and selling price;
solve for cost price, operating
expenses, profit and selling price;
and
actively participate in the
classroom
discussions. 3
Activity: FOOD SALE!!!
Assume that you will be
planning a food sale in
school where you will
have to sell banana cue
to your school mates on
a selected day. 4
TASK 1: 1 minute & 30 sec.

List down the raw

materials needed and
estimate its cost.
Assume that you will be
selling 20 pcs.
5
TASK 2: 1 minute & 30 sec.
List down the other
expenses and estimate
its cost, good for 20 pcs.

e.g. rent, tissue, salary

6
COST PRICE:
-the price that a company or store
has to pay for the goods it is
going to sell.

In the previous class activity, the

cost price refers to the price of
the raw materials needed to
produce the banana cue. 7
OPERATING EXPENSES:
-the price incurred relative to the
production and sale of a commodity
 
- In the previous example, the operating
expenses would be those additional
expenses that have to be incurred by the
group in the actual selling of the banana
cue such as gas, fare and other
incidental expenses.
8
TASK 3: 30 seconds

How much will be your

selling price?
How did you arrive with
such selling price?
9
SELLING PRICE:
-the price at which the commodity is sold per
unit

SELLING PRICE = COST PRICE + OPERATING COST + PROFIT

S=C+O+P
where:
S = Selling Price
C = Cost Price
O = Operating Expenses
P = Profit
10
TASK 4: 30 seconds

How much will be your

profit?
How did you come up with
such profit?

11
PROFIT:
- money earned after the cost price and the
operating expenses are accounted for after
the sale of commodity.

- In the class activity, the profit would be the

difference between the selling price
decided on by the group (multiplied by 20,
assuming all 20 pcs are sold out) and the
total of the costs of the raw materials and
other expenses detailed in the discussion.
12
ILLUSTRATIVE EXAMPLE:
Aling Ana would like to sell notebooks she
purchased from Divisoria for P12 each. If the
operating cost is set at 25% of the cost and
she would like to have a 15% profit on the cost
of each item. Assuming she was able to sell
50 pcs in one day. Compute for the following:

1. Total cost price 4. Profit per

unit
2. Operating expenses per unit 5. Total profit
3. Total operating cost 6. Selling price per
unit 13
ILLUSTRATIVE EXAMPLE:
An item was sold for P1 300. If the
cost price is 80% of the selling price
and the operating expenses is set at
15% of the cost, how much will be
the profit?

a. cost price
b. operating expenses
c. profit 14
ACTIVITY: A WISE CHOICE!(1
min.)
Item A was sold for P100. The cost
price is 60% of the selling price and
the operating expenses is set at 15%
of the cost. While item B was sold
for P120 with a cost price of P90 and
its operating expenses is 10% of the
selling price. If you are the seller,
which item will you sell that will yield
to a higher profit?
Item A or Item B 15
ANSWER:

A
16
ACTIVITY: A WISE CHOICE!(1
min.)
Item A was sold for P1500. The cost
price is 50% of the selling price and
the operating expenses is set at 30%
of the cost. While item B was sold
for P1260 with a cost price of P980
and its operating expenses is 10% of
the cost price. If you are the seller,
which item will you sell that will yield
to a higher profit? Item A or Item B 17
ANSWER:

A
18
ACTIVITY: A WISE CHOICE!(1
min.)
You are torn between two same items
(A&B) with different selling price. The
cost price of item A is P50 and the
operating expenses is set at 30% of the
cost price while its profit is 20% of its
cost price. While item B’s cost price P60
and its operating expenses is 15% of the
cost price while its profit is 8% of its cost
price. Which one will you buy to be able
to save? Item A or Item B 19
ANSWER:

B
20
EVALUATION: 10 minutes
CHRISTMAS SPIRIT!!!BE
GENEROUS!
Plan for a simple food sale to raise funds
for your group to be able to help less
fortunate families in your locality. Decide
on what to sell. Compute for your cost
price, operating expenses and profit to be
able to come up with your selling price.
Cite some strategies that you will do on
the day of the food sale to be able to
raise more funds. 21
 4 (Exceeds 3 (Meets 2 (Needs 1 (Not Visible)
Expectations) Expectations) Improvement)

Reasoning Uses complex and Uses effective There is some There is little
refined mathematical evidence of evidence of
mathematical reasoning. mathematical good
reasoning. reasoning. mathematical
reasoning.

Strategy An efficient and Typical effective Use of Rarely uses

effective strategies effective good strategy
strategy is put to use are put to use in strategy is not to go about
in solving the very solving the
solving the problem. problem. consistent. problem.

Cooperation Student was an Student was an Student Student did

engaged engaged worked not work
partner, listening to partner but had cooperatively effectively
suggestions from problems with with
others and listening to others others but others.
working or working needed
cooperatively cooperatively. prompting to
throughout the task. stay on-task.
22
 4 (Exceeds 3 (Meets 2 (Needs 1 (Not Visible)
Expectations) Expectations) Improvement)

Explanation Explanation is Explanation is Explanation Explanation

detailed and clear. was a little was difficult
clear. difficult to to
understand understand
but included and was
critical missing
components. several
components.

Timeliness Finished the task Finished the task Finished the Finished the
before the given on the given task 1-5 task 6-10
time limit time limit minutes after minutes
the given after the
time limit given time
limit

23
AGREEMENT:

Read and study about mark-up,

mark on and mark down.
Differentiate these from each other.

24
 THANK YOU &
GODBLESS!!!
MERRY CHRISTMAS
EVERYONE….
25
26
Mrs. Rosa P. Garello
Cagayan National High School
Tuguegarao City
27
SPECIFIC OBJECTIVES:
At the end of the lesson, the
students should be able to:
differentiate mark up, mark down
and mark on;
illustrate how mark up, mark down
and mark on are obtained; and
actively participate in the
classroom
discussions.
28
MARK-UP

the difference between the selling

price and the cost price
sometimes referred to as MARGIN
or GROSS PROFIT

29
MARK-UP

MARK-UP = SELLING PRICE – COST PRICE

MU = S – C
where MU = Mark-up
S = Selling Price
C = Cost Price

30
Initial Mark-up

Cost………………………………………….. P 100
Plus: Initial Mark-up ………………... P
20
Original selling price ………………….P
120

31
Additional mark-up

- Refers to amounts added to the

original selling price to arrive at a
new selling price.

32
Additional mark-up
Original Selling Price ……………….. P 120
Plus: Additional Mark-up…………. P 30
New Selling price P
150

Note: Initial mark-up and additional

mark-up as mark-up only.
33
Profit vs Mark-up
Profit accounts for both the cost price and
operating cost incurred by the business owner
 
Mark-up only accounts for the cost of raw
materials necessary to produce the item being
produced for sale

34
Mark-on

Now, pretend that during the actual food sale, your

group realizes that there is such a high demand for
your banana cue and that buyers can easily afford the
selling price you have pegged. Some businesses
will want to take advantage of this peak season and
thus, increase the prices already pegged for their
commodities. This is what we call the MARK-ON.

35
Mark-on

MARK-ON = PEAK SELLING PRICE – REGULAR SELLING

PRICE
MO = PS – S
PS = Peak Selling Price
S = Regular Selling Price

36
Mark-on

What are the reasons

why a mark-on becomes
an option for a business
owner?
37
reasons why a mark-on becomes an
option for a business owner

• a calamity has hit the source of a raw

material or commodity therefore
affecting its supply
• seasonal demands (Christmas items,
Valentines, etc.)
• special occasion is being celebrated
(commemorative, death anniversary, etc.)
38
Mark up cancellation
- Refers to the
decrease in the new
selling price that does
not decrease below
the original selling
price. 39
Mark up cancellation
New Selling Price: ………………………. P
150
Less: Mark Up Cancellation…………. P
10
Reduced Selling Price …………………. P
140
Less: Mark up Cancellation………….. P
20
Original Selling Price …………………… P
120 40
Markdown
- Refers to
reduction in the
original selling
price.
41
Mark up cancellation
Original Selling Price…………….……. P
120
Less: Markdown……………………..……P
5
New Reduced Selling Price ..………. P
115
Less: Markdown……………..………….. P
5
Original Selling Price …………………… P
110 42
 THANK YOU &
GODBLESS!!!
MERRY CHRISTMAS
EVERYONE….
43
Mrs. Rosa P. Garello
Cagayan National High School
Tuguegarao City
44
Markup and Margin
Margin – sales minus the cost of
goods.
Example:
If a profit of sells for P 200.00 and
costs P 140 to manufacture, its
gross margin is P 60.00. The margin
is 30%.
Markup based on sales or selling
price is calculated as margin / sales.
45
Markup and Margin
Mark-up is the amount by which the cost
of a product is increase in order to derive
the selling price.

Example: A mark up of P 60 to the P140

cost yields the P 200 selling price.

Mark-up based on sales or selling price

is calculated as markup amount divided
by the product cost. 46
Mark-up and Margin
Margin Markup
(Marku based
p based on Cost
on
Sales
Cost P 140 70% 100.00
%
Mark-up P 60 30% 42.86%
Selling P 200 100% 142.8647
Mark Up based on Cost
Sales Selling Price ……………………………..…. P450
Cost of Goods Sold (Cost)……………………… P 300
Gross profit (Mark up)………………………….. P 150

Selling Price ………. P 450 150%

Cost …………………...(P 300) (100%)
Markup……………… P 150 50%

48
Percent for the Selling Price and
Markup

49
Example

Selling Price ………. P ? 130%

Cost …………………...(P 200) (100%)
Markup……………… P ? 30%

50
Mark Up based on Selling Price

Selling Price ………. P 450 100%

Cost …………………...(P 300) (66.67%)
Markup……………… P 150 33.33%

51
Cost and mark-up in percent

52
Example

Selling Price ………. P ? 130%

Cost …………………...(P 200) (100%)
Markup……………… P ? 30%

53
Converting Mark up Based on Cost to
Markup Based on Selling Price and Vice
Versa.
Rate Rate based
based on Selling
on Cost Price
Selling P 150 100.00%
Price
Cost P 100 ?
Mark-up 50% ?
54
Converting Mark up Based on Cost to
Markup Based on Selling Price and Vice
Versa.

55
Markdown

56
Markdown

Old Selling Price ….............…… P 450100.00%

New Reduced Selling Price ….. (P400)
88.89%
Markdown …………………………….P 50 11.11%

57
Problem Solving
1. Aling Ana would like to sell little trinkets she
purchased from Divisoria for PhP12 each. If
the
operating cost is set at 25% of the cost and
she would like to have a 15% profit on the cost
of each item,
a. Determine the mark-up price for each trinket.
b. Help Aling Ana determine the selling price
for each trinket.

58
Examples:
2. A jacket which costs
PhP1,350 is being sold
at PhP2,025. What is the
rate of mark-up based
on cost?
59
Examples:
3. Julia buys a notebook
with a cost of PhP45. The
rate of mark-up based on
cost is 25%. Find the selling
price and the mark-up.
60
Examples:
4. The selling price of Julia’s
notebook is PhP56.25 which
includes a mark-up of PhP11.25.
Peter decides to impose a mark-up
of PhP5 on each pen he sells to his
classmates and friends. This
represents a 20% mark-up based on
the selling price. Find the cost and
the selling price of the pens Peter
sells.
61
Examples:
5. A top costs Mang Mario
PhP280 and he decides to
mark it up by 30% of the
selling price.
Find the selling price and
mark-up for the said top.
62
Examples:
6. Find the cost and mark-
up of a box of pencils being
sold
for PhP135 with a 25%
mark-up based on selling
price.
63
Examples:
7. Manang Crising observes that market goers
prefer to buy fish from her because there is an
undersupply of meat in the market this season.
She then decides to increase the price of
galunggong by PHP10 per kilo. If the cost of
galunggong is PHP90 per kilo with a 35%
mark-up,
what is its new selling price with the additional
increase of PHP10? By how much is the rate
of mark-up based on cost increased by adding
PHP10 to the regular selling price of the
galunggong? 64
Examples:
8. Yvette’s Flower Shop imposes a 45% mark-
up on flowers delivered to them for sale.
During
All Saint’s Day, however, an additional mark-on
of 25% of the regular selling price is added on.
Determine the unit price of 300 roses worth
PhP15,000 delivered to Yvette’s Flower Shop
during All Saint’s Day. How much is the selling
price of each rose during All Saint’s Day at this
flower shop?
65
Examples:
9. Find the regular selling price
and the cost price of memorabilia
items being sold for PhP500 if
the mark-up is set at a rate of
25% of the cost price with an
approved 15% mark-on rate
based on the cost price included
because of a special event. 66
This time, consider
that the sale of your
banana cue is coming
in slow.
67
You may need to sell it
at a DISCOUNTED PRICE
or what is commonly
known as the SALE
PRICE.
68
MARK-DOWN: the difference between the
REGULAR SELLING PRICE and the SALE
PRICE
 
MARK-DOWN = SELLING PRICE – SALE PRICE
MD = S – SP
where MD = Mark-Down
S = Selling Price
SP = Sale Price
69
Mark-downs commonly happen
when the mall decides to sell their
items at cut down prices to clear
their warehouse collection. For
instance, some items which usually
sold for PhP150 are sold at 50% off
during mall sales and so the mark-
down price is set at PhP75.
70
other reasons why a mark-down is
sometimes thought of as an option
1. the item is a perishable item
and it is best to dispose of it
sooner than simply throw it away
2. the item has become dirty or
worn out, or possibly out of style
3. competition forces the
marking down of an item 71
Remember that rates of mark-downs are
always computed based on the selling
price.
Note that it is possible that instead of
making the business owner earn a
positive profit, selling an item on sale
sometimes gives rise to a negative profit.
In this case, the profit is said to be a
LOSS. 72
When an item is given a
selling price where the
profit ends up being zero,
this is said to be the BREAK-
EVEN PRICE.
73
Break-Even Price = Cost Price + Operating Cost
 
BEP = C + E
Where BEP = Break-Even Price
C = Cost Price
E = Operating Expenses

74
Examples:
1. Carlo was able to buy a pair of
shoes regularly priced at PhP3,500
for only PhP2,100.
a. What was the amount of the mark-
down?
b. What was the rate of the mark-
down?
 
75
Examples:

2. During a Midnight Madness Sale, a board game

regularly priced at PhP8,500 was sold at
55% discount. The cost of the board game is PhP3,
450 and expenses are 14% of the regular
selling price.
 
a. What was the amount of the mark-down?
b. What was the rate of the mark-down?

76
Examples:

3. Super Mall paid PhP15,000 for a set of dishes.

Expenses are 18% of the selling price while the
required profit is 15% of the selling price. During an
inventory sale, the set of dishes was marked down by
30%.
a. What was the regular selling price?
b. What was the sale price?
c. What was the profit or loss?

77
Vertical Analysis- primarily involves the comparison
of one number with another to identify significant
relationships.
- Used on preparation of common-sized statements.

Common Sized Statement- financial statement

expressed in percent.

78
Convert the following Income Statement to
a Common-Size Statement

Probability and Statistics Lesson 1 79

Convert the following Income Statement to
a Common-Size Statement

Probability and Statistics Lesson 1 80

A company’s total assets is P 200 000.00 its current
assets represent 25% and the rest represent fixed
assets. Find the amount of:
a. Current Assets
b. Fixed Assets

81
4. Find the banker’s ratio or working capital ratio for a
firm with the total current asset of P 30 000.00 and
the total current liabilities of P 15 000.00. Working
capital ratio is Current Assets(CA) over Current
Liabilities (CL)

82
Ratio Analysis

It is a form of vertical analysis.

It is used to determine certain ratios important in
business decision-making, like determining
profitability ratios, liquidity ratios, solvency ratios,
asset utilization, etc.

83
Profitability Ratios

The ratios show how profitable a firm is and also

measures the return or earnings on investment.

84
Return on Owner’s Investment (ROI)

85
Return on Owner’s Investment (ROI)

86
Return on Owner’s Investment (ROI)

87
Profit Margin or Return on Sales (ROS)

88
Profit Margin or Return on Sales (ROS)

89
Liquidity/Solvency Ratios

It refers to the ratios used to

gauge if the company can meets
its current liabilities.

90
Liquidity/Solvency Ratios

91
Debt Ratios

This solvency ratio shows the

relationship between the total
liabilities and the total assets of
the firm.

92
Debt Ratio

93
Horizontal Analysis

-It is also known as trend analysis.

-It refers to comparing figures of financial statement
of one period with figures of financial statement of
another period.
-it shows the trend whether increasing or decreasing
of certain amounts, say sales or net income.
-It is expressed in both amount and percent

94