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Business-Math - Q1 - W6 - M6 - LDS - Profit and Loss - ALG - RTP
Business-Math - Q1 - W6 - M6 - LDS - Profit and Loss - ALG - RTP
Department of Education
REGION I
SCHOOLS DIVISION OF CANDON CITY
Candon City, Ilocos Sur
BUSINESS MATHEMATICS
Quarter 1 – Week 6 - Module 6:
Prepared by: Sadiri Mat T. del Rosario
Lesson
Profit and Loss
1
I. OBJECTIVES
1. Differentiate profit from loss
2. Solve for the profit given the cost and net sales
3. Determine if profit is achieved or loss is incurred in a given transaction.
II. GUIDE QUESTIONS
1. What is the difference between profit and loss?
2. How do you solve for profit given the cost and net sales?
3. How do you determine if profit is achieved or loss is incurred in a given transaction?
III. DISCUSSIONS
One important accounting tool is the “Profit & Loss Statement”. This financial document
is very helpful in monitoring whether the business is doing great in generating revenue or is already
incurring a loss. In this way, necessary measures can be set-up in place if needed. The statement
consists of the computation of gross income, which is, Sales minus cost of goods sold; totals of
expenses related to the business operations; and, finally, the net income, or net loss, whatever
maybe the case. Simple business computations, however, only require a direct determination of
profits or losses through identification of how much is invested in buying the goods to be sold
from how much returns back when sold. The term being used to refer to what is invested is called
“cost” and the term used for describing what returns back is called “sales.” The difference of these
two can either result in a profit or loss.
A profit is achieved when a business is able to sell its products more than its expenses. In
other words, a profit occurs when the sales is more than the cost, thus the formula:
Profit = Sales – Cost
On the other hand, a loss is incurred when the Cost is more than the sales, thus the formula:
Loss = Cost – Sales
Example 2:
Offering a discount to customers may increase sales but decreases the profit per item. The
increase in sales should be able to offset the effect of the decreased profit per item in order to have
over-all increase in profit. Otherwise, it is not a practical idea to make a discount even if it
increases your sales. Let’s illustrate this.
Problem:
A lady’s boutique owner decided to offer a 10% discount to a particular brand of lady’s
fashion shoulder bag that normally sells at P3,000. By doing so, her average sales per day of 3
bags increased to 10 bags a day. If she bought these bags from supplier at P2,500, by how much
was the daily profit increased or decreased after offering such discount on each bag?
Solution:
We need to compute for the daily profit before and after the discount was offered.
Without discount: Profit per bag = P3,000 – P2,500 = P500
Profit for selling 3 bags = P500 X 3 = P1,500 per day.
With 10% discount : Net Sales = P3,000 X (1 – 0.10) = P3,000(.90)
= P2,700
Profit per bag = P2,700 – P2,500 = P200
Profit for 10 bags = P200 X 10 = P2,000.
Increase in daily profit: P2,000 – P1,500 = P500
V. GENERALIZATION
Profits occur whenever the proceeds or inflow of resources out beat proceeds of outflow of
resources. Meaning, if what comes back to you is greater than what had previously been spent for
the same intentions, then you have a profit. Just the other way around, if what goes out of you in
terms of goods and services that you had previously sacrificed is greater than what you have
received as pay back, then you are experiencing a loss. However, when having simultaneous
transactions which yields a mixture of profits and losses, offsetting these with each other for the
net result determines the real score. Such is the idea of solving mathematical problems involving
simple determination of profit or loss.
___1. Bea bought a pen at P12 each and sold it for P15.
___2. Marvie bought a laptop at P22,000. When a new and upgraded model was released lately,
she sold hers for P15,000 to buy a new one.
___3. An empanada vendor gains P150 for selling a piece for P35.
___4. A box containing 50 pieces of sign pen costs P3,300. It was sold for P66 each.
___5. Jenny bought an orchid for P750 on a “buy 2-take-1” promo. She sold each at P300.
___6. Jorge, a technician, bought an old laptop for P8,000 and spent P14,000 for updating its
processor & memory. He later sold it for P20,000. How much is his loss?
a. ₱2,000 b. ₱3,000 c. ₱6,000 d. ₱12,000
___7. Arvy bought a second-hand motorcycle for P15,800 and spent P3,550 on its repairs. If he
sold it for P16,700, what is his percent profit or percent loss?
a. 13.7% profit b. 13.7% loss c. 15.87% profit d. 15.87% loss
___8. What is the percent profit or loss when a car bought for P899,000 is sold for P755,160?
a.19.05% loss b. 16.0% loss c. 19.05% profit d. 16.0% profit
___9. Mario bought 5 sacks of rice at P1,900 each. He sold 3 of them at P2,200 and the remaining
at P1,850. What is his profit or loss?
a. ₱100 loss b. ₱150 loss c. ₱800 profit d. ₱900 profit
___10. Jayvee bought two tripods at P180 each. He sold one of them to his friend at P150 and
the other to a neighbor at P220. How much is Jayvee’s profit or loss?
a. ₱70 profit b. ₱40 profit c. ₱30 loss d. ₱10 profit