It may be more than, equal to or less than the cost price of the product. Selling Price (SP): It is the amount at which a product is sold. So the total cost price is the sum of all the expenditure done, that is, Rs 12,500. For example, you bought a refrigerator at Rs 10,000 and spent Rs 2000 for transportation and Rs 500 for set up. Sometimes it also includes overhead expenses, transportation cost, etc. Profit stands for gain, advantage or benefit whereas loss is the opposite of profit that involves expenditure as compared to gain.Ĭost Price (CP): It is the amount at which a product is purchased. We have come across the word profit and loss many times. Similarly, if the good is repurchased at a lesser price then there is a loss. When a good is re-purchased at a greater price then a profit is incurred. The term 'Profit and Loss' is a concept developed from various applications to real-life problems which take place in our lives almost every day. Comparing prices is also a form of profit and loss as you learn to save money by buying the same good at a comparatively lesser price. Later, kids come across the concept of discount on the cost price and the concept of comparing prices before purchasing. Parents often take their kids to the supermarket to make them learn about the price marked on every good and the calculation of total price. Money is actually a tricky concept to explain to kids without giving them an opportunity to get hands-on experience. It is very important to familiarize yourself with profit and loss, not only to run a business or company but also to keep an account of your own expenditure. Every company and business works on the fundamental concept of profit and loss.
0 Comments
Leave a Reply. |
AuthorWrite something about yourself. No need to be fancy, just an overview. ArchivesCategories |