Cost Price:
The cost price of an article is the amount spent to purchase it or the price at which it is manufactured. C.P. is an abbreviation for cost price.
Selling Price:
The selling price of an item is the price at which it is sold. S.P. is an abbreviation for selling price.
What is Profit?
If the selling price of an article is greater than its cost price, we say that there is a profit (or) gain.
What is Loss?
If the selling price of an article is less than its cost price, we say that there is a loss.
Profit and Loss Formula
Note:
- If the S.P. of the object is equal to the C.P., then there is no loss or profit.
- If the C.P. is more than the S.P., there is a loss.
- If the S.P. is more than the C.P., there is a profit.
Profit Formula
The profit percentage is always calculated on the cost price of the article.
When S.P. > C.P.
Loss Formula
The loss percentage is always calculated on the cost price of the article.
When S.P. < C.P.
What is Discount?
To reduce inventories or motivate buyers, stores often have sales of goods, and shopkeepers offer rebates to customers. Instead of a percent increase, this is a percent decrease, which results in a sale price. The price printed on the price tag of an article is known as its marked price or listed price. The price at which the article is sold to the customer is the selling price. Discount is always calculated on the marked price of the article.