- Buying Price, Selling Price, Profit and Loss.
Trades involve seller and buyers. Sellers deliver goods to buyers, while the buyers pay some money as compensation for the goods received.
To have the goods sell, sellers buy from the manufacturers, wholesalers, or other parties. The price of goods the factories, the wholesalers or other parties charge is called the buying price, while the amount of money received by the sellers from selling the goods is called the selling price. Thus, a trade is always associated with selling price or capital on which calculations are based.
In a trade, ther are two possible outcomes a seller may face :
- The seller earns a profit, or
- The seller suffers a loss.
To understand profit, see the following the decription !
Mrs. Nuri bought 1 box of drinking water which contained 48 glasses at a price Rp. 14.000 The drinking water was then sold at a price of Rp. 500 per glass. Compare the buying price and the selling price!
Buying price = Rp. 14. 000
Selling price = 48 x Rp 500
= Rp. 24. 000
Apparently, the selling price is higher than the buying price.
The different between the selling price and the buying price is
= Rp. 24. 000 – Rp. 14. 000
= Rp. 10.000
In this case, Mrs. Nuri earns a profit of Rp. 10.000.
Based on the description above, we can draw the following conclusion.
A seller is said to earn a profit if the selling price is higher than the buying price.
If the selling price is higher than the buying price, then a mount of profit is equal to the selling price less the buying price. For this case, we get the following relations.
The percentage of profit is the amount of profit compared to the buying price.
To better understand this, see the following example !
A toy store sold 10 dolls and made Rp. 420.000 from the sale. The store earn a profit of Rp. 90.000. Find the buying price of each doll !
Answer : selling price of 10 dolls = Rp 420.000
Buying price of 10 dolls = selling price – profit
= Rp. 420.000 – Rp. 90.000
= Rp. 330.000
Buying price of each doll =
= Rp. 33.000
Eddy bought a computer set at a price Rp. 4.500.000. One day, the computer was repaired at a cost of Rp.275.000, and then sold at a price of Rp.4.250.000. If the cost of repair and the buying price are include in the capital, then :
The capital is = Rp. 4.500.000 + Rp. 275.000
Selling price = Rp. 4.250.000
Thus, the selling price is lower than the capital, and it is said that Eddy have suffered a loss.
The different between the capital and the selling price is
= Rp.4.775.000 – Rp. 4.250.000
= Rp. 525.000
Thus, Eddy suffered a loss of Rp. 525.000
Based on the above description, we can draw the following conclusion.
A seller is said to suffer a loss if the selling price as lower than the buying price ( the capital)
The loss equal the buying price less the selling price. From this case, we have the following relations.
The percentage of loss is the amount of loss compared to the buying price
To better understand this, see the following example !
Mr. Putu bought 40 starfruits at a price of Rp. 30.000. the starfruits were then sold at a price of Rp. 2500 for every 2 units.
- Did Mr. Putu earn a profit or suffer a loss?
- What was the profit or the loss?
Buying price of 40 starfruits = Rp. 30.000
Selling price of 2 starfruits = Rp. 2500
Selling price of 40 starfruits =
= 20 x Rp. 2500
= Rp. 50.000
- Based on the above answer, we get that selling pricer is higher than buying price. It is mean Mr. Putu earn a profit.
- Profit = Selling price – Buying price
= Rp. 50.000 – Rp. 30.000
= Rp. 20.000
Discount is the cut of selling price by some amount. Discount is usually given to buyers by some wholesalers or stores.
Discount is often used as means to attact buyers. For example, some shops doing a clearance sale offer a discount of 10 % up to 50 % on the basis that buyers are attact to shop if they feel that the price is lower than as it should be.
Look at the following example .
A book store offers a 15% discount for all kind of books. If Mini buys a book priced at Rp. 54.000, then how much Mini must pay for the book?
The price of a book = Rp. 54.000
= Rp. 8.100
Thus, Mini must pay = Rp. 54.000 – Rp. 8.100
= Rp. 45.900
Based on the above example, we get the following formula
In the above formula, the gross price is the price before the discount and the net price after the discount.
- Gross, Tare and Net
The total weight of a sack of rice it contains is 50 kg. If the weight of the sack alone is 0,80 kg, then :
The weight of the rice = 50 kg – 0,80 kg
= 49,2 kg
The total weight of the sack and the rice, which is 50 kg, is called a gross weight.
The weight of the sack, which is 0,80 kg, is called a tare.
The weight of the rice, which is 49,20 kg, is called a net weight.
Thus, the relationship between gross weight, tare and net weight can be formulated as follows.
If the percent gross weight and the percent tare are known, then to find tare the following formula is used.
For every purchase with a discounted weight (tare), the following formula is used.
A seller buys 4 sacks of rice each having a gross weight of 72 kg and a tare of 1%. How much the seller must pay if the price per kg rice is Rp.5.000 ?
Gross weight = 4 x 72 kg
= 288 kg
Tare 1% = = 2,88 kg
Net weight = 288 kg – 2,88 kg
The seller must pay = 285,12 x Rp 5.000
= Rp. 1.425.600
- A seller bought 100 kg of eggs at a price of Rp. 6.500 per kg and the delivery cost was Rp. 25.000. The eggs werw then sold at a price of Rp. 7.600 per kg. If 2 kg of the eggs were broken, find the amount of the profit earn or the loss suffered !
- Mrs. Ria bought 5 dozen toys for Rp. 150.000. after all the toys were sold out Mrs. Ria suffered a loss of Rp.12.000. Find the selling price of each toys!
- A school cooperative bought 50 packs of books each containing 20 unit at a price of Rp. 1.200 each. The delivery cost and other expenses were Rp. 40.000 in total. If the cooperative wants to earn profit of 25%, what must the selling price of each book be?
- Mr. Beny buys 2 boxes of orange. Each box weighs 25 kg and the price of the oranges is Rp.4.000 per kg. If the tare = 8%, then how much must Mr. Beny pay?
- A wholesale store bought 25 scores of clothes at a price of Rp. 24.000 each. The store got a 5% discount and sold the clothes for Rp.27.000 per sheet. What was the net profit earn by the store?