profit and loss...

Before look further into this subtopic,we must understand some of the terms:

operating expenses=OP

breakeven price=BE(no profit or loss is gain)

net price=NP

Gross profit=GP

so,the formula used is:R=C+NP+OE

Example:

A refrigerator was bought for RM4599.The operating expenses incurred in selling the

refrigerator totalled 30%of the cost.If the dealer made a net profit of 20% based on

cost,find

a) the selling price of the refrigerator

b) the gross profit

c) the breakeven price

d) the maximum markdown percent that could be offered so that there is no loss

or profit.

solution:

a) R=C+NP+OE

=4599+0.2(4599)+0.3(4599)

=RM6898.50

b) Gross profit=NP+OE

=0.2(4599)+0.3(4599)

=RM2299.50

c) Beakeven price=C+OE

=4599+0.3(4599)

=RM5978.70

d) Maximum reduction in price=retail price-breakeven price

=RM6898.50-RM5978.70

=RM919.80

Now,I found out that there is so interesting to start a business because there are profit,loss and many more that we can apply in our business..one day,when I run my own business,I will apply all of these in my business!!!