Calculating Cost Price and Selling Price

Oct 13, 2025 by magicalceylontours.com 86 views

Introduction

In the world of business, making a profit is the ultimate goal. A businesswoman's decision to buy and sell bananas at different prices can be a great way to understand the concept of profit and loss. In this article, we will explore how to calculate the percentage profit made by a businesswoman who bought 288 bananas at Sh 10 for every 12 and sold them at Sh 20 for every 18.

Calculating Cost Price and Selling Price

To calculate the percentage profit, we first need to determine the cost price (CP) and selling price (SP) of the bananas.

Cost Price (CP): The businesswoman bought 288 bananas at Sh 10 for every 12. To find the cost price of 288 bananas, we can divide 288 by 12 and multiply the result by 10.
- 288 ÷ 12 = 24
- 24 × 10 = Sh 240 So, the cost price of 288 bananas is Sh 240.
Selling Price (SP): The businesswoman sold all 288 bananas at Sh 20 for every 18. To find the selling price of 288 bananas, we can divide 288 by 18 and multiply the result by 20.
- 288 ÷ 18 = 16
- 16 × 20 = Sh 320 So, the selling price of 288 bananas is Sh 320.

Calculating Profit and Percentage Profit

Now that we have the cost price and selling price, we can calculate the profit and percentage profit.

Profit: Profit is the difference between the selling price and cost price.
- Profit = Selling Price - Cost Price
- Profit = Sh 320 - Sh 240
- Profit = Sh 80 So, the profit made by the businesswoman is Sh 80.
Percentage Profit: Percentage profit is the profit divided by the cost price and multiplied by 100.
- Percentage Profit = (Profit ÷ Cost Price) × 100
- Percentage Profit = (Sh 80 ÷ Sh 240) × 100
- Percentage Profit = 0.33 × 100
- Percentage Profit = 33% So, the percentage profit made by the businesswoman is 33%.

Conclusion

In conclusion, the businesswoman made a profit of Sh 80 by selling 288 bananas at Sh 20 for every 18 after buying them at Sh 10 for every 12. The percentage profit made by the businesswoman is 33%. This example illustrates the importance of calculating profit and percentage profit in business transactions.

Real-World Applications

Calculating profit and percentage profit is essential in various business scenarios, such as:

Retail Business: Retailers need to calculate profit and percentage profit to determine the profitability of their products.
Manufacturing Business: Manufacturers need to calculate profit and percentage profit to determine the profitability of their products.
Service-Based Business: Service-based businesses need to calculate profit and percentage profit to determine the profitability of their services.

Tips and Tricks

Here are some tips and tricks to help you calculate profit and percentage profit:

Use a Calculator: Use a calculator to simplify calculations and avoid errors.
Break Down Complex Problems: Break down complex problems into smaller, manageable parts to make calculations easier.
Check Your Work: Check your work to ensure accuracy and avoid errors.

Frequently Asked Questions

Here are some frequently asked questions related to calculating profit and percentage profit:

What is profit?
- Profit is the difference between the selling price and cost price.
What is percentage profit?
- Percentage profit is the profit divided by the cost price and multiplied by 100.
How do I calculate profit and percentage profit?
- To calculate profit and percentage profit, you need to determine the cost price and selling price of the product or service, and then use the formulas: Profit = Selling Price - Cost Price and Percentage Profit = (Profit ÷ Cost Price) × 100.

Conclusion

Q&A: Calculating Profit and Percentage Profit

Q: What is profit?

A: Profit is the difference between the selling price and cost price. It represents the amount of money earned from selling a product or service.

Q: What is percentage profit?

A: Percentage profit is the profit divided by the cost price and multiplied by 100. It represents the percentage increase in value of a product or service.

Q: How do I calculate profit and percentage profit?

A: To calculate profit and percentage profit, you need to determine the cost price and selling price of the product or service, and then use the formulas:

Profit: Profit = Selling Price - Cost Price
Percentage Profit: Percentage Profit = (Profit ÷ Cost Price) × 100

Q: What is the formula for calculating profit?

A: The formula for calculating profit is:

Profit = Selling Price - Cost Price

Q: What is the formula for calculating percentage profit?

A: The formula for calculating percentage profit is:

Percentage Profit = (Profit ÷ Cost Price) × 100

Q: How do I calculate the cost price and selling price?

A: To calculate the cost price and selling price, you need to determine the number of units sold and the price per unit.

Cost Price: Cost Price = Number of Units × Price per Unit
Selling Price: Selling Price = Number of Units × Selling Price per Unit

Q: What is the difference between cost price and selling price?

A: The cost price is the price at which a product or service is purchased, while the selling price is the price at which it is sold.

Q: How do I calculate the profit margin?

A: To calculate the profit margin, you need to divide the profit by the selling price and multiply by 100.

Profit Margin = (Profit ÷ Selling Price) × 100

Q: What is the profit margin?

A: The profit margin is the percentage of profit earned from selling a product or service.

Q: How do I calculate the return on investment (ROI)?

A: To calculate the ROI, you need to divide the profit by the cost price and multiply by 100.

ROI = (Profit ÷ Cost Price) × 100

Q: What is the ROI?

A: The ROI is the percentage return on investment earned from selling a product or service.

Q: How do I calculate the break-even point?

A: To calculate the break-even point, you need to divide the fixed costs by the profit margin.

Break-Even Point = Fixed Costs ÷ Profit Margin

Q: What is the break-even point?

A: The break-even point is the point at which the revenue equals the fixed costs, and the business starts to make a profit.

Conclusion

In conclusion, calculating profit and percentage profit is essential in business transactions. By understanding the formulas and concepts, you can make informed decisions and increase your chances of success. Remember to use a calculator, break down complex problems, and check your work to ensure accuracy and avoid errors.