Business Mathematics and Statistics · Ch 1 — Profit and Loss
Cost Price, Selling Price, Profit and Loss
Cost Price, Selling Price, Profit and Loss
Every act of buying and selling in trade turns on two prices: the price at which a trader buys an article and the price at which the trader sells it. The difference between the two decides whether the transaction ends in a gain or a shortfall. This idea — profit and loss — is the foundation of business arithmetic and is part of the Odisha CHSE Higher Secondary (+2) 1st-Year Business Mathematics and Statistics course under Business Arithmetic. The topic is universal commercial mathematics; the Odisha CHSE Std-11 syllabus draws on the same well-established arithmetic principles that underlie commerce teaching across boards.
Cost Price (CP) is the price at which an article is purchased. Selling Price (SP) is the price at which the same article is sold.
- If , the trader makes a profit (gain), and
- If , the trader suffers a loss, and
- If , there is neither profit nor loss (a break-even sale).
Overhead / additional expenses
The cost of an article is not always just its purchase price. A trader often spends extra on transport (cartage/freight), loading, repairs, or packing before the article is ready to sell. These overhead expenses are added to the purchase price to get the total cost price: Profit or loss is always measured against this total cost price, not the bare purchase price.
Both profit and loss are amounts of money (in ₹). To compare how good or bad a deal is, though, an amount alone is not enough — a profit of ₹100 on an article costing ₹200 is far better than the same ₹100 profit on an article costing ₹10,000. That is why profit and loss are almost always expressed as a percentage, which the next section develops.
The price at which an article is bought by the trader, including any overhead expenses (transport, repairs, packing) incurred before it can be sold.
The price at which the article is actually sold to the customer.
The excess of selling price over cost price: , arising when the article is sold for more than it cost.
The excess of cost price over selling price: , arising when the article is sold for less than it cost.
Additional costs — transport, cartage, loading, repairs, packing — spent on an article before sale; they are added to the purchase price to form the total cost price.