Cost price: The price, at which an article is purchased, is called its cost price. In short we write it as C.P.
Selling price: The price, at which an article is sold, is called its selling price. In short we write it as S.P.
Gain: If S.P is more than C.P, then the seller has a profit or gain.
If SP > CP then Gain = SP – CP.
Loss: If S.P is less than C.P, then the seller has a loss.
If SP < CP then Loss = CP – SP.
Note: Loss or gain is always calculated on cost price (C.P).
Profit %: Profit on Rs. 100 is called Profit %. Formula for Profit percentage = .
Loss %: Loss on Rs. 100 is called Loss %. Formula for Loss percentage = .
Overhead expenses: Sometimes, apart from paying the cost of an article, a shopkeeper has to spend money on transportation, labour, repair, . . . . such expenses are called overhead expenses.
Actual C.P of an article = Cost of article + Overhead expenses.
To find selling price (SP) when cost price (CP), gain % or loss % are given:
1. SP = , when R% is the gain.
2. SP = , when R% is the loss.
To find cost price (CP) when selling price (SP), gain % or loss % are given:
1. CP = , when R% is the gain.
2. CP = , when R% is the loss.