Profit & Loss
Aptitude(Numeracy & Reasoning)- 21st century literacies
Profit and Loss Lesson Plan
Total Time: 90 minutes
Instructor Note: This unit would help the learners understand the basics of profit and loss and their applications in daily life. Students learn to use the concepts of percentage for calculating profit and loss, rather than applying formulas. They get an idea of transactions, buying, selling, marked price, discount and their impact on profit and loss.
(After concept discussion & practice) Display/distribute handout consisting of questions. Foundation section will compromise 4 questions, instruct students that they will be given 8 minutes to discuss among themselves & solve these 4 questions, whichever group solves maximum problems wins maximum points on the points table (refer opening protocol). Award 5 marks for each correct answer given by a group. Move around the class to check procedures used by students to solve problems. Once time is up, provide solutions and explanations for each question.
Switch to moderate level. This section comprises 4 questions and cumulative time allotted will be 10 minutes. All other instructions remain the same.
Switch to HOTS. This section comprises 3 questions and cumulative time allotted will be 15 minutes. All other instructions remain the same.
Section 1: Understanding the concept of Profit & Loss.
1.) Cost Price (CP)
2.) Selling Price (SP)
5.) Marked Price (MP)
And using these concepts we would write all the formulas. Interesting?
So, Let’s unravel them one by one.
1.) Cost Price or CP in layman’s terms is the price at which an article has been purchased.
2.) Selling price or SP is the price at which the item has been sold.
3.) Profit is the amount one has gained in carrying out a transaction, i.e. by selling an item.
4.) Loss in the same way is the amount one loses in selling an item.
5.) Marked price or MP is the price that a shopkeeper or your shopping sites label for the item.
6.) Discount is the term which we all want for everything we buy. Ok, Jokes apart, it is the amount that is provided we need not to pay for the MP.
Simple, isn’t it. Trust me, indeed it is that simple as it seems in these definitions, all that is required is a generic and streamlined approach of problem solving, rather than some heavy weight formulas.
So from this transaction we could easily infer that the trader earned a profit on selling the cow to the farmer, so the cost price for the trader comes out to be Rs. 8000/-.
Now consider another case,
So what we conclude is that we need to first chalk out the transaction that is being discussed before advancing towards any calculations.
Students, we would be analyzing the underlying concepts rather than relying on ready-made formulae, so that we could solve any problem related to this topic, and at the end of all this concept building, you would be in a position to write all the formulas on you own.
Just remember basic things like, if SP is greater that means profit is made, and if CP is greater than SP, loss is incurred.
Also, profit % or loss % would always be calculated by keeping CP as reference, as evident from the previous statement.
Let’s take an example and understand all the concepts one by one.
Ans.) Here we have a situation in which a boy is selling his bicycle, (Businessman in making!). Okay, so coming to the problem now,
We get the selling price that is given in the question itself, i.e. Rs.600.
Now, as stated earlier we need to focus on the transaction involved, upon selling the bicycle at Rs.600, he gains 20%, so we get an idea that the SP is 20% more than the CP. So, we easily calculate CP as Rs.500, and profit as Rs.100.
Till now, we have not discussed any formulae, rather solely relied on concepts and analysis of transactions involved.
Ans.) Here, we have the purchase price, that is the CP = Rs.12000, also the selling price is 15000, so we see that the SP > CP, therefore we have profit involved here.
So, profit would be how higher the SP is than CP, so we get ,
Profit = SP-CP.
So, Profit = 15000-12000= 3000
Now, bonus question, lets calculate profit % here, for that again concepts come into play, since profit is calculate by keeping the CP as the reference, therefore for calculating Profit %, we need to take CP as reference again and calculate that how much % more is SP than CP or in more simpler terms, Profit is what % of CP. Task done!!!!
So, Profit % = (Profit/CP)x100
OR Profit % = ((SP-CP)/CP)x100
Now, from the above case, we deduce that the MP of the watch is Rs.4000, and the discount provided is 25%.
Since discount is provided over the MP so, we calculate the value of discount as 25% of MP, i.e. Rs.1000.
And we get the SP as MP-Discount = Rs.3000.
NOTE: Since discount is provided on MP, therefore for calculating discount, using discount%, we would always use MP as the reference. As was the case with Profit or Loss %, in which we used CP as the reference.
Let’s take a quick example to brush up the concepts discussed.
Ans.) Here we see that one banana costs Rs.5, so for 24 bananas, Ram needs to pay Rs.24×5 = Rs.120. But, for each dozen he gets a discount of Rs.6, so the net discount comes out to be = Rs.12.
Therefore, the SP comes out to be Rs.120-12= Rs.108 (This is the amount Ram needs to pay to get 2 dozen bananas).
Now, for discount %, as discussed earlier, we need to consider MP as the reference value for calculating the same. So, discount % = (Discount/MP) x100. Which comes out to be: (12/120) x100 = 10%.
But before jumping to that, I would like out teams to come up and write all the formulas of the terms discussed till now. Write as much formulas as you can, by just recalling the basic definitions of the terms, and let’s see how the concepts work wonders for us. It is always the concept that derived the formula, so focus on the basics and concepts!
Section 2: Foundation:
2.) A man sells his scooter for Rs.5000, after gaining a profit of Rs.1000. Find: i.) CP, ii.) Profit %
3.) On selling 100 bicycles the retailer earns Rs.240000. Also he books a profit of Rs.40000. Find the cost of each bicycle.
4.) The shopkeeper marks his goods at Rs.100 each. Also, a discount of 20% is provided at the store. What amount needs to be paid to buy two items from the store?
Section 3: Moderate:
1.) A shopkeeper sold his goods at Rs.2500 and made a profit of 25% in the process. Find his profit % if he had sold the goods at Rs.2200.
2.) The cost price of 50 mangoes is equal to the selling price of 40 mangoes. Find the profit or loss %.
3.) Anil bought an article at Rs.200 and sold it at a profit of 10%. What would be the increase in profit % if it was sold at Rs.230?
4.) Aman sells his brand new watch marked at Rs.5000, to his friend and gains Rs.500, despite providing a discount of 10%. Find the price Aman had paid while buying the watch for him.
Section 4:HOTS – HIGH ORDER THINKING SKILLS:
1.) A merchant sells two puppies at the same price; on one he makes a profit of 20%, whereas he incurs a loss of 20% on the other. Find his loss or gain % on the whole transaction.
2.) The MP of a table is Rs.1200, which is 20% above the cost price. If it is sold at a discount of 10%. Find the profit %.
3.) What price should a shopkeeper mark his goods, costing him Rs.153, to gain 20% after allowing a discount of 15%?
Exp Time 10 minutes