Profit and Loss

Activity:
1. Greg bought a laptop for Php28,000 and spent Php2,500 for its spares. He later sold it
for Php25,000. How much is Greg’s loss?
Given:
Cost= Php 28,000 + Php 2,500 = Php 30,500
Net Sales= Php 25,000
Loss = Net Sales – Cost
Loss = 30,500 - 25,000
Loss = Php 5,500
Greg has a Php 5,500 loss upon selling his laptop
2. Martin bought 18 chairs at Php350 each. He sold 12 of them at Php450 each, and the
remaining at Php300 each. Calculate his gain or loss.
Given:
Cost= 18 * Php 350 = Php 6,300
Sales for the 12 chairs = 12 * Php 450 = Php 5,400
Sales for the remaining 6 chairs = 6 * Php 300 = Php 1,800
Net Sales = Php 5,400 + Php 1,800 = Php 7,200
Profit = Net Sales – Cost
Profit = 7,200-6,300
Profit = Php 900
Martin gained Php 900
3. A mobile phone was sold for Php4,800. Find the cost of the mobile phone if the profit is
20%.
Given:
Net Sales = Php 4,800
Profit = 20% of Php 4,800 = Php 960
Cost = ?
 Profit = Net Sales – Cost
960 = 4,800 -Cost
960 - 4,800 = -Cost
−3,840
−cost
−¿= ¿
−¿ ¿
Cost = Php 3,840
BREAK-EVEN ANALYSIS
Problem: The finance department of XYZ Battery modeled that the company’s cost function is
given by 𝐶(𝑥)=156+19.7𝑥, where 𝐶(𝑥) is the cost in thousand pesos for manufacturing and
selling 𝑥 thousands of batteries. The department arrived at the price-demand function given by
𝑝(𝑥)=94.8−5𝑥, where 𝑝(𝑥) is the price of each battery if 𝑥 thousands of battery are demanded.
Given:
𝐶(𝑥)=156+19.7𝑥
𝑝(𝑥)=94.8−5𝑥
1. How much is the price if 9,480 batteries were sold?
Let x = 9,480/1,000 = 9.48
p(x)=94.8-5x
p(x) = 94.8 – 5(9.48)
p(x) = 94.8 – 47.4
p(x) = Php 47.4
total price = Php 47.4 * 9,480 = Php 449,352
2. Set up a revenue function.
R=p*x
R = (94.8 – 5x)x

R=94.8 x−5 x 2
3. Using the revenue function and the cost function, set up the equation for the profit
function.
P = R – TC
P = (94.8x – 5x2) – (156 + 19.7x)
P = – 5x2 + 94.8x – 156 – 19.7x
P = -5x2 + 75.1x - 156
4. Find the break even points.
R = TC
94.8x – 5x2 = 156 + 19.7x
0 = 5x2 – 94.8x + 19.7x + 156
0 = 5x2 -75.1x + 156
a= 5, b= -75.1, c= 156

−b−√ b 2−4 ac
x 1=
2a
x 1=−(−75.1)−√¿ ¿ ¿

75.1−√ 2520.1
x 1=
10
x1 = 2.4900

−b+ √ b2 −4 ac
x 2=
2a

−(−75.1 )+ √(−75.1)2−4 (5)(156)

x 2=
2(5)

75.1+ √2520.1
x 2=
10
x2 = 12.5301
If x=2.4900
R = 94.8x – 5x2 = 94.8(2.4900) – 5(2.4900)2 = 205.0515
If x=12.5301
R= 94.8x – 5x2 = 94.8(12.5301) – 5(12.5301)2 = 402.8365
Hence, the break-even points (2.4900,205.0515), (12.5301,402.8365)
5. Will the company experience loss if 12,000 batteries were sold? Justify.
Let x=12,000/1,000 = 12
P = -5x2 + 75.1x – 156
P = -5(12)2 + 75.1(12) – 156
P= -720 + 901.2 – 156
P= -876 + 901.2
P= Php 25.2