Department of Education

Region III
DIVISION OF MABALACAT CITY

Name: __________________________________ Grade & Strand: ________________

School: ____________________________________________ Date: ________________

LEARNING ACTIVITY SHEET

ABM 11 BUSINESS MATHEMATICS (Q1-WK6)
Gross Margins, Discounts, Profit and Loss in Business

I. Introduction

The value of key concepts in buying and selling to financial managers and
company owners is to consider how much money must be generated for its
resources.

Company owners want to know if the sales are enough to cover the costs.
For example, the profit and loss statement is one of the methods for
understanding the net profits of companies, which can be useful in decision-
making.

As future financial managers and company owners someday, you may want
to learn how much of any sales peso flows to your business's bottom line.

This Learning Activity will help attain this goal. Treat yourself in studying!

II. Learning Competency

The learners are able to differentiate mark-up from margins, describe how
margins is used in sales, compute single trade discount and discount series,
differentiate profit from loss, illustrate how profit obtained and how to avoid
loss in a given transaction. (ABM_BM11BS-Ih-3, ABM_BM11BS-Ih-4,
ABM_BM11BS-Ih-5, ABM_BM11BS-Ii-6, ABM_BM11BS-Ii-7).

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III. Objectives
After going through this Learning Activity Sheets, you are expected to
1. define and discuss the difference of mark-up from margins;
2. describe how gross margin used in sales;
3. compute single trade discount, discount series, margin percentage and
mark-up percentage;
4. differentiate profit from loss;
5. explain how profit is obtained and how to avoid loss in a given
transaction; and
6. solve problems involving profit and loss.

IV. Discussion

Differentiate Mark-Up from Margins

In the previous lesson, we define Mark-Up as the amount by which cost of a

product is increased in order to derive the selling price, on the other hand,
Margin which is also known as gross margin is Revenue or Sales minus cost
of goods sold.

Margin = Revenue or Sales – Cost of goods sold.

This is important in sales because it shows whether the said sales is

sufficient to cover the costs. And to get the Margin percentage, we calculated
margin amount divided by sales or revenue.

Margin % = Margin amount Sales or Revenue multiply by 100%.

For example:
A pilot pen cost for Php30.00 and sold for Php50.00. How much is the
margin amount and its percentage?

Solution: Margin = Revenue/Sales – Cost of goods sold = 50 -30 = Php20.

Margin % = Margin amount Sales (100%) = 20 50=0.40(100%) = 40%.

From the same example, a mark-up of Php20.00 from the Php30.00 yields
the Php50.00 price.

We get; Mark-Up = Sales – Cost = Php50 -30 = Php20.

Mark-Up% = Mark-Up amount Cost (100%) = Php20 30 (100%) =

66.67%.

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Single Trade Discount and Discount Series

A single trade discount is a discount that is given to a customer or the

wholesaler when the customer/wholesaler buys a product. It is a percentage
related problem. For example, if you say that you will give 50% off to the
price of each dozen of pencil you sell, you are giving a single trade discount.
The formula used to solve for the single trade discount is given by:

Trade Discount = Original Price or List Price Discount Rate.

Form this equation we also come up with:

List price = Trade Discount Discount Rate.

Discount Rate % = Trade Discount Original price or List price then

multiply by 100%.

To compute for the Net Price, we just subtract the Trade discount from the
list price.

Net price = List Price or Original price – Trade discount.

For examples:
1. Find the trade discount for Samsung A5 phone that list for Php14,500
and has a trade discount of 10%.

Solution: Trade Discount = List Price Discount rate

= Php14,500 0.10 = Php1,450.00

2. Find the net price of a camera that lists for Php320 and has a trade
discount of 10%.

Solution: Trade Discount = List Price Discount rate

= Php320 0.10 = Php32.00

Net price = List price – Trade discount

= Php320 – 32 = Php288.00

3. An air conditioning unit, listed at Php30,000 with a discount of Php6,000

is offered to a customer. Determine the discount rate.

Solution: Discount rate = Trade discount List price

= Php6,000 30,000 = 0.2 multiply by 100% = 20%.

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Discount Series is a type of discount wherein through a combination of
conditions. These are given to customers in order to encourage them to buy
in volume.
For example:

1. Suppose a discount series of 20%,10%, and 5% is given to an item with a

list price of Php400. How much is the net price?

Solution: Php400 0.2 = Php80; Php400 – Php80 = Php320

Php320 0.10 = Php32; Php320 – Php32 = Php288
Php288 0.05 = Php14.40; Php288 – Php14.40 = Php273.60

Php273.60 will be the net price

Using the Single Discount Rate (Equivalent of the Discount Rates)

1. What single discount is equivalent to two successive discounts of 20%

and 30%?

Percent given: 20% and 30%

Complement of percent given: 80% and 70% respectively

Multiply: 0.80(0.70) = 0.0.56

Take the complement percent: 1-0.56 = 0.44 or 44%

Hence the two successive discounts of 20% and 30% is equivalent to 44%

Profit and Loss

Profit is a financial gain, wherein the difference between the amounts

earned and the amount spent in buying, operating, or producing something.

Where the Net Sales is the amount of money received from selling goods,
and Cost is the amount paid for the goods. However, there are cases in
which the Net Sales of goods is less than its cost; such difference is called
Loss. To compute for the profit we use:

Profit = Net Sales –Cost

To express loss mathematically as:

Loss = Cost – Net Sales

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For examples:

1. Jenny bought a pen for Php120. Then sold it for Php80. How much is
Jenny’s gain or loss?

Given: Cost -Ph120 Net Sales - Php80

Loss = Cost – Net Sales

= Php120 – 80
= Php40 Loss

2. Ben bought an IPhone 4 which cost Php8,000.00 and sold it to his friend
for Php10,500.00. How much Ben’s gain or loss?

Given: Cost- Php8,000 Net Sales – Php10,500

Profit = Net Sales –Cost

= Php10,500 – 8,000
= Php2,500 gain

V. Activities

Activity # 1: Margin versus Mark-up

Compute the margin and mark-up using the data below. Write your answer
on the blank. Round off your percentage to two decimal places.

Sales Cost Margin/Mark-up Margin% Mark-up%

Php200 Php190 1._______________ 2.___________ 3._____________

Php200 Php180 4._______________ 5.___________ 6._____________
Php200 Php170 7._______________ 8.___________ 9._____________
Php200 Php160 Php40 10.___________ 25%

Activity # 2: Complete the missing part

Complete the table below. Write your final answer for each number. Use
another sheet of paper for your computation of single trade discount. Round
off your percentage to two decimal places.

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 Discounted
Original Price Trade Discount Discount Rate Price
Php6,000 Php4,200 (1) (2)
(3) Php50 25% (4)
(5) Php3900 (6) Php2,100
Php20,000 (7) 60% (8)
Php8,000 Php6,500 (9) (10)

Activity # 3: Supply the missing part

Complete the table below by supplying the missing part of the discount
series using the complement of percentage.

Decimal Equivalent of
Percentage Complement of Complement of
Percentage Percentage
11% (1) 0.89
(2) (3) 0.43
3% (4) (5)
(6) (7) 0.80
14% (8) (9)
82% (10) 0.18

Activity # 4: Analyze it!

A. Analyze each problem. Use another sheet of paper in answering questions

of single trade discount and discount series. (With solution)

1. How much is the selling price of a washing machine listed at Php1,650.00

if a 10% discount is given to the customer?
2. A coffee maker was sold to a customer at Php700.00 after a 25%
discount. What is the original price of the coffee maker?
3. A notebook 's price which was originally valued at Php50.00 is reduced to
Php25. What is the rate of the discount?
4. Irene saved a total of Php1,600.00 after a 25% discount that was given to
all of her purchases. How much was her total purchases?
5. The 10% discount on a basketball shirt amounts to Php480.00.Compute
the net price

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B. Compute for the equivalent single discount of the following discount
series. Round off your answer to percentage.

6. 20% and 10%

7. 15% and 35%
8. 25% and 40%
9. 30% and 40%
10. 25% and 35%

Activity # 5: Solve it!

A. Solve the following problems for profit and loss. Write your solution on
another sheet of paper.

1. Andrew buys an old scooter for Php15,700.00 and spends Php1,500.00

on its repairs. If he sells the scooter for Php13,800.00. How much is
Andrew’s loss?

2. Ben bought a notebook at Php30.00 each and sold it for Php40.00. How
much Ben’s profit or gain?

3. Joan bought a 32GB memory card at Php500.00 and decided to sell it to

her sister for Php400.00. How much is Joan’s loss?

4. Ian bought a laptop from his neighbor at Php18,500.00 each. He sold one
of the laptop to his cousin at Php15,500.00 while the other one was sold
to his friend at Php20,200.00. How much is Ian’s profit or loss?

5. Find the percent gain or percent loss when a car bought for
Php925,000.00 is sold for Php850,000.

B. Determine whether the statement shows a profit or loss situation. Write P

for profit and L for loss on the blank before each number.

________6. Jona bought a scientific calculator at Php1,500.00 and sold it to

her classmate for Php1,000.00 when the new upgraded model was
released after two months.
________7. Kris bought a pencil at Php20.00 each and sold it for Php25.00.
________8. The cost of the 10 bottles of strawberry jam is Php1,800.00. Then
it was sold for Php150.00 each.

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________9. The cost of 10 pieces of banana cue per stick is Php100.00. It was
sold for 20 each.
________10. Gio bought a Harry potter book for Php1,300.00 and decided to
sell it to his best friend for Php1,000.00.

VI. Assessment

A. Multiple Choice. Read the following problem. Encircle the letter of the
correct answer.

1. The cost of an apple is Php72.00 per kilo and has the list price of
Php89.00 per kilo, what is the margin %?
A. 81% B. 23.6% C. 19.1% D.17%

2. For the same question on no.1, what is the mark-up if the list price is
Php89.00 and the cost is Php72.00?
A. 81% B. 23.6% C. 19.1% D. 17%

3. A convenience store buys 1 gallon of jugs of milk for Php150.00 and

sells them for Php350.00. What is the margin % they earn on the
milk?
A. 57.1% B. 1.3% C. 50% D. 13.3%

4. What single discount is equivalent to two successive discounts of 20%

and 10%?
A. 35% B. 30% C. 29% D. 28%

5. What is the complement percent if the given percentage is 40% and

30%?
A. 60% and 70% B. 40% and 30% C. 70% D. 40%

6. Lisa bought an IPhone 11 for Php80,000.00 each and sold it for

Php120,000.00. How much Lisa’s profit?
A. Php80,000 B. Php40,000 C. Php120,000 D. Php200,000

7. Jose bought 15 chairs for Php3,750.00. Then sold them for Php5,000.
A. Ph1,250 loss C. Php3,750 gain
B. Php1,250 gain D. Php50 loss

8. Find the net price of a Gucci bag that has a list price of Php16,000.00
and has a trade discount of 30%.

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 A. Php48,000 B. Php11,200 C. Php22,850 D. Php16,000

9. A rice cooker after a 50% discount, was sold at a price of Php800.00.

What is the original price of the rice cooker?
A. Php400 B. Php1,800 C. Php1,600 D. Php800

10. What single discount is equivalent to two successive discounts of 15%

and 25%?
A. 0.6375 B. 36.25% C. 67.35% D. 36.65%

VII. Reflection

Let’s say you are a seller, how will you apply the concepts of this lesson to
attract buyers?

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VIII. Reference

Books

Dagal, Keneth Adrian P., Martin-Lundag, Leah C., Lopez, Brian Roy C.,
Business Math 1253 G. Arneta Avenue, Quezon City, by Vibal Group, 2016.

Website

wps.prenhall.com

www.businessnewsdaily.com

www.enotes.com

smallbusiness.chron.com

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1. C 1. Php3,400 1. Php1,485
2. B 2. Php10 gain 2. Php2,800
3. A 3. Php100 loss 3. 50%
4. D 4. Php1,300 4. Php6,400
5. A loss 5. 50%
6. B 5. 8.82% 6. 28%
7. B 6. L 7. 44.75%
8. B 7. P 8. 55%
9. C 8. L 9. 58%
10.B 9. P 10.51.25%
10.L
Assessment Activity 5 Activity 4
1. 70%
1. 89% 1. Php10
2. Php,800
2. 57% 2. 5%
3. Php200
3. 43% 3. 5.26%
4. Php150
4. 97% 4. Php20
5. Php6,000
5. 0.97 5. 10%
6. 65%
6. 20% 6. 11.11%
7. Php12,000
7. 80% 7. Php30
8. Php8,000
8. 86% 8. 15%
9. 81.25%
9. 0.86 9. 17.65%
10.Php1,500
10.18% 10. 20%
Activity 3 Activity 2 Activity 1
IX. Answer Key
X. Development Team

Development Team of the Learning Activity Sheets

Writer: Jonalyn S. Galan

Editor: Baby Lala B. Tan / Anthony Rayley M. Cabigting, DEM
Reviewer: Kevin Junior P. Gomez, MBA
Illustrator:
Layout Artist:
Management Team: Edgard C. Domingo, PhD CESO V
Leandro C. Canlas, PhD, CESE
Elizabeth O. Latorilla, PhD
Sonny N. De Guzman, EdD
Elizabeth C. Miguel, EdD

For inquiries or feedback, please write or call :

Department of Education – Division of Mabalacat

P. Burgos St., Poblacion, Mabalacat City, Pampanga

Telefax: (045) 331-8143

E-mail Address: mabalacatcity@deped.gov.ph

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