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By selling an article for Rs. 960 a man incurs a loss of 4%; What was the cost price?
The cost price of the article is Rs. 1000.
To find the cost price, we first need to understand that a loss of 4% means the selling price (SP) is 96% of the cost price (CP).
Let’s denote CP as the cost price. Given: Selling price (SP) = Rs. 960 Loss = 4%
We can set up the equation using the formula:
SP = (1 – (Loss%/100)) * CP
Substituting the given values:
960 = (1 – (4/100)) * CP
960 = 0.96 * CP
Now, to find the cost price, we divide both sides by 0.96:
CP = 960 / 0.96
CP = 1000
So, the cost price of the article is Rs. 1000.
Cost Price and Selling Price
Cost price (also known as cost of goods sold or cost of production) is the total amount of money spent to produce a product or service. This includes the cost of raw materials, labor, manufacturing overhead, and any other expenses directly attributable to the production process.
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Selling price, on the other hand, is the amount at which a product or service is sold to customers. It is the price that customers pay to acquire the product or service.
The relationship between cost price and selling price is crucial for determining profitability. The basic principle is that the selling price should ideally be higher than the cost price in order to generate a profit. The difference between the selling price and the cost price is known as the profit margin.
Mathematically, the profit (P) can be calculated as:
P = Selling Price – Cost Price
If the selling price is greater than the cost price, the result will be positive, indicating a profit. If the selling price is less than the cost price, the result will be negative, indicating a loss.
It’s also common to express the profit margin as a percentage, which can be calculated as:
Profit Margin (%) = ((Selling Price – Cost Price) / Cost Price) * 100%
This percentage represents the proportion of the selling price that is profit.
Understanding and effectively managing the relationship between cost price and selling price is fundamental to the success of any business, as it directly impacts profitability and sustainability.
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Source: Math Hello Kitty
Categories: Math
