Business Mathematics

Quarter 1: Week 7
SENIOR HIGH SCHOOL

What I Need to Know

As we study and involve ourselves in Business Mathematics, it is essential to

know the concept and formula about Profit and Loss in order to determine the price of a
commodity in the market and understand how profitable a business is.
After going through this module, you will be able to :
1. differentiate profit from loss
2. illustrate how profit is obtained and how to avoid loss in a given transaction

What I Know
Find the profit, loss, selling price and cost price of the following:
1. Michelle purchased a house for Php49,000.00. She spent Php6,000.00 for repair and
Php5,000.00 for air-conditioning. If she had sold the house for Php58,000.00, find the loss
in this transaction.
A. Php4,000.00 B. Php3,000.00 C. Php2,000.00 D. Php2,000.00
2. Kathy bought 50 pens for Php100.00. She then sold each pen for Php2.50. Find the profit.
A. 1 peso B. 75 cents C. 50 cents D. 10 cents
3. Martin sold a watch to his friend at a loss of 5%. If his friend paid Php650.00 for it, find the
original cost of the watch.
A. Php648.21B. Php684.21 C. Php617.50 D. Php635.50
4. A mobile phone was sold for Php4,800.00. Find the cost price of the mobile phone if the
profit is 20%.
A. Php5760.00 B. Php5670.00 C. Php4,000.00 D. Php3,000.00
5. A shopkeeper buys digital camera at Php5,400.00 each. Due to price fall in the market, he
was forced to sell them at a loss of 15%. Find the selling price of each digital camera.
A. Php4,590.00 B. Php4,950.00 C. Php6,352.94 D. Php6,532.94

What’s In
Buy- and –sell business is a good side business for those who want to get extra
income on top of their salary. A profit and loss report, also known as an income
statement, shows the profitability of your business over a specific period. It can cover
any period of time, but is most commonly produced monthly, quarterly or annually.
A profit and loss report is a useful tool for monitoring business activity. Every
product has a cost price and selling price. Based on the values of these prices, we can
calculate the profit gained or the loss incurred for a particular product. The important
terms covered here are cost price, selling price, percent gain or loss, etc.

What’s New
Fill in the blanks.
Cost Price Selling Price Profit Loss
1 (1) Php5,900 (2) Php490.00
2 Php1,200.00 (3) (4) Php180.00
3 Php2,400.00 (5) Php400.00 (6)
4 (7) Php2,900.00 Php100.00 (8)
5 (9) Php1,450.00 Php45.00 (10)
6 Php1,900.00 (11) (12) Php300.00
7 Php4,100.00 (13) Php300.00 (14)
8 (15) Php1,590.00 (16) Php60.00

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 What is it

The difference between what a merchant invests into business and what he receives in
return is called profit. To compute for profit, we use:
Profit = Net Sales - Cost
Where:
` Net Sales is the amount of money received from selling goods
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. We can express loss mathematically as,
Loss = Cost - Net Sales
In the case when Net Sales is equal to Cost, we call such situation as break-even. But
this will be discussed in the next module.

Example 1:
A watch store owner decided to offer a 20% discount for a particular brand of watch that
sells at Php35,000.00. By doing so, his average sales increased from 5 watches to 12 watches
daily. If he bought one watch at a price of Php22,000.00 from the supplier, by how much was
the daily profit increased or decreased by offering such discount on the watch?
Solution:
Profit per watch = 35,000 – 22,000
= Php13,000.00

Profit for selling 5 watches = 13,000(5)

= Php65,000.00
With 20% discount,
New Selling Price = 35,000 – 0.2(35,000)
= Php28,000.00
Profit per watch = 28,000 – 22,000
= Php6,000.00
Profit for 12 watches = 6,000(12)
= Php72,000.00
Increase in daily profit = 72,000 – 65,000
= Php7,000.00

Example 2:
Karen bought one dozen smartphones for Php200,000.00 with a discount of 5%. She
sold half dozen at a price of Php18,000.00 per unit. However, a new model of smartphone
became available in the market, so she sold the remaining half dozen at Php12,000.00 each
unit. What was her profit or loss?
Solution:
Cost of 12 pieces of smartphones = 200,000 - 0.05(200,000)
= Php190,000.00
Net Sales:
For 6 smartphones at a price of Php18,000.00 per piece = 18,000(6)
= Php108,000.00
For 6 remaining phones at a price of Php12,000.00 per piece = 12,000(6)
= Php72,000.00
Total Net Sales = 108,000 + 72,000
= Php180,000.00
Loss = Cost – Net Sales
= 190,000 – 180,000
= Php10,000.00

Example 3:
Mary went to Baguio and bought 20 jars of strawberry jam for Php3,500.00 with 15%
discount. When she got back to Manila, she sold 10 of the jars for a total of Php1,800.00 and
the rest at Php185.00 each. How much profit did Mary gain?

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 Solution:
Cost of the 20 jars of strawberry jam = 3,500 -3,500(0.15)
= Php2975.00
Net Sales:
First 10 jars Php1,800.00
Remaining 10 jars = 185(10)
= Php1850.00
Total Net Sales = Php3,650.00
Profit = Net Sales – Cost
= 3,650 – 2,975
= Php675.00

Some basic formulas used in solving questions on profit and loss:

 Gain % = (Gain / CP) x 100

 Loss % = (Loss / CP) x 100
 SP = [(100 + Gain%) / 100] x CP
 SP = [(100 – Loss %) / 100] x CP
CP = [100 / (100 + Gain%)] x SP
CP = [100 / (100 – Loss%)] x SP
Example 4:
  An article is purchased for Php450.00 and sold for Php500.00. Find the gain
percent.
Solution:
Gain = SP – CP = 500 – 450 = 50.

Gain% = (50/450) x 100 = 100/9 % or 11.11%

Example 5:

A man sold a fan for Php465.00. Find the cost price if he incurred a loss of 7%.

Solution:

CP = [100 / (100 – Loss %)] x SP

Therefore, the cost price of the fan = (100/93) x 465 = Php500.00.

What’s More
A. Determine whether the statement shows a profit or loss situation. Write P for Profit
and L for Loss.
_____ 1. Karl bought a pen at Php10.00 each and sold it for Php12.00
_____ 2. Princess bought a scientific calculator at Php2,000.00. When a new and
upgraded model was released after two months, she sold her scientific calculator
for Php1,200.00 to buy the new one.
_____ 3. A banana cue vendor gains Php100.00 for selling it at Php10.00 per stick.
_____ 4. The cost of 10 pieces personalized calendar is Php850.00. It was sold for
Php150.00
_____ 5. Shirley bought a 16GB memory card at Php600.00 and decided to sell it to her
sister for Php650.00.

B. Obtain the profit, loss, selling price , and cost price of the following problems. Write the
letter of your choice.
1. Ronald buys a geyser for Php3,680.00 and sells it at a gain of 7%. For how much does he sell it?
A. Php3,937.60 B. Php3,397.60 C. Php3,973.60 D. Php3,793.60

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2. On selling of fan for $ 810, Sam gains 8%. For how much did he purchase it? 
A. Php507.00 B. Php705.00 C. Php750.00 D. 755.00
3. Adrian bought 50 dozens of pencils at Php60.00 a dozen. Out of these, 20 pencils were found
broken. He sold the remaining pencils at Php7.00 each. Find his percent gain or loss?
A. 71.43% B. 35.33% C. 26.11% D. 25.24%
4. A shopkeeper makes a profit of 15% after reducing the marked price of a transistor by Php32.00. If
the cost price is Php320.00, what percentage of profit would he have if he had sold the transistor at
the marked price?
A. 12% B. 16% C. 22% D. 25%
5. A certain store sells a badminton racket whose marked price is Php30.00, at a discount of 15% and
gives a shuttlecock costing Php1.50. Even then he makes a profit of 20%. His cost price per racket
is____.
A. Php20.00 B. Php24.00 C. Php28.00 D. Php34.00

What I have Learned

The price at which an article is purchased is called its cost price (CP).
Price at which an article is purchased is known as selling Price (SP).
If SP is greater than CP then the seller is said to have profit or gain.
If SP is less than CP then the seller is said to have incurred loss.

Reflective Question:
As a student, can you think of an specific experience wherein you
can say that you gain or loss?

Find the profit, loss, selling price, cost price, and gain or loss percent of the following
situations:

1. Kathy bought a laptop for Php28,000.00 and spent Php2,500.00 on its spares. She later sold it for
Php25,000.00. How much is Kathy’s loss?

2. Joy went to Bicol and bought 25 packs of Pili nuts for Php875.00 with 10% discount.. When she got
back to Manila, she sold 15 packs for Php675.00, and the rest at Php40.00 each. How much profit
did Joy gain?

3. Alfred buys an old scooter for Php14,700.00 and spends Php1,800.00 on its repairs. If he sells the
scooter for Php15,800.00, what is his percent gain or percent loss?

4. A dealer losses Php5,000 when he sells a furniture at a loss of 10%. How much is the selling price
of the furniture.

5. A second hand car was sold for Php190,000.00, at a loss of Php85.00. Find the cost price of the
car.

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 Business Mathematics
Quarter 1: Week 8
SENIOR HIGH SCHOOL

What I Need to Know

As we study and employ ourselves in Business Mathematics, it is needed to know the
concept on break-even point, buying, and selling of products.
As you go through this module, you will be able to:
1. determine the break-even point
2. solve problems involving buying and selling product

What I Know
A. Fill in the blanks.
Instructions: Identify the following terms. Choose the answers from the box.

Variable Cost Revenue Fixed Cost

Profit Break-even Total Cost

__________1. The difference between what a merchant invests into business and what he
receives in return.
__________2. It  is a cost that does not change with an increase or decrease in the
amount of goods or services produced or sold. 
__________3. The case when net sales is equal to cost; it happens when business has zero
profit for a particular product.
__________4. This can be obtained by getting the sum of cost and expenses.
__________5. It is a corporate expense that changes in proportion to production output.
__________6. It is the income generated from normal business operations and includes
discounts and deductions for returned merchandise.

B. Solve the following problems.

1. From the following particulars below, find out the break-even point:

Variable Cost per unit 25

Fixed Expenses 35,000
Selling Price per unit 30

2. A firm sells a product of 45 pesos per unit. The cost function for this product is
Php19,125.00. Find the quantity that the firm needs to sell in order to break-even?
A. 420 units C. 400 units
B. 410 unit D. 425 units

What’s In
In business, when total cost is higher than revenue, the level of sales is losing. When
revenue is higher than total cost, the business is making a profit. Finally, the point at which
revenue is equal to total cost is called the break-even point.
In accounting, the break-even point formula is determined by dividing the total fixed
costs associated with production by the revenue per individual unit minus the variable costs per
unit. In this case, fixed costs refer to those which do not change depending upon the number of
units sold. Put differently, the breakeven point is the production level at which total revenues for
a product equal to total expenses.

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What’s New
I. Let x be the number of units. Complete the table below.

VARIABLE COST FIXED COST TOTAL COST

10x 2,000 (1)
(2) 400 30x + 400
5x (3) 5x + 1,500
(4) 2,500 40x + 2,500
40x 8,000 (5)

II. Let x be the number of units. Complete the table below.

REVENUE TOTAL COST PROFIT

px VC + FC (6)
500x (7) 300x – 1,000
(8) 40x + 2,500 160x + 6,000
35x 15x + 600 (9)
(10) 10x + 1,200 20x + 1,200

What is it
In business, when total cost is higher than revenue, the level of sales is losing.
When revenue is higher than total cost, the business is making a profit. Finally, the point at
which revenue is equal to total cost is called the break-even-point.
The break-even analysis is significant in examining the relationship among various
elements such as costs (variable and fixed), prices, and volume of sales that will lead to the
best combination that will make revenue and total cost equal.
The cost necessary to keep the business running regardless of the sales volume is
called the fixed cost. This includes rent, salaries of employees, loans, basic utilities, and other
necessary expenditures. The variable cost, on the other hand, is the cost of producing each
product.

How to calculate Break-even Point in Units:

Fixed Costs ÷ ¿SalesPrice per unit – variable costs per unit)
Where:
Fixed costs - are the ones that typically do not change or change only slightly.
Sales Price per Unit - is how much a company is going to charge consumers
for just one of the products that the calculation is being done for.
Variable Costs per Unit – are costs directly tied to the production of a product
like labor hired to make that product, or materials used. It often
fluctuate, and are typically a company’s largest expense.
Example:
From the following particulars below, calculate:

i. Break-Even Point in terms of sales and in units

ii. number of units that must be sold to earn a profit of Php90,000.00

Fixed Factory Overhead Cost Php60,000.00

Fixed Selling Overhead Cost Php12,000.00
Variable Manufacturing Cost per Unit Php12.00
Variable Selling Cost per Unit Php3.00
Selling Price per Unit Php24.00
Solution:
¿ Cost
i. Break-even point (BEP) =
Selling Price−Variable Cost per unit
Variable Cost per unit = 12 + 3 = 15
Total Fixed Cost = 60,000 + 12,000
= 72,000
 72,000 72,000
Break-even point = = = 8,000 units
24−15 9
BEP ( in sales values) = 8,000 x 24
= 192,000

ii. number of units that must be sold to earn profit of 90,000

¿ Cost + Profit
BEP =
Selling Price per Unit−Variable Cost per Unit
72,000+ 90,000
=
24−15
162,000
¿
9
= 18,000 units

One important factor in break-even analysis is the revenue. It is the product of the price
and the quantity sold. It is usually seen on the top item in an income ( profit and loss) statement
from which all costs and expenses is subtracted to arrive at net income. The revenue (R) is
given by
R=p٠x
Where p is the price and x is the number of units.
At break-even, the total cost TC is compared with the total revenue R to determine the
level of production (that is, number of units produced) at which
TC = R
Recall that, Profit = Revenue – Cost
At break-even, we want to determine the level of production at which the profit will be
equal to 0. The point at which the business will neither earn a profit nor experience loss is
known as the break-even point (BEP).

Example 1:
A store owner sells one whole pad paper at Php10.00 per pad. The fixed cost is Php5,000.00
and the variable cost is Php5.00 per pad.
a. At what level of production (that is, number of whole pad paper) will the business owner
have a profit of Php2,000.00? A loss of Php1,000.00?
b. How many pad papers will the break even?
c. Find the break-even point.
Solution:
a. P = R – TC
= 10x – (5,000 + 5x)
= 5x – 5,000
P = 2,000
2,000 = 5x – 5,000
7,000 = 5x
X = 1,400
To obtain a loss of 1,000, we set P = -1,000 and solve for x,
-1,000 = 5x – 5,000
4000 = 5x
X = 800
b. P = 5x – 5,000 = 0
X = 1,000 pad papers
c. When x = 1,000, we get
R = 10(1,000)
= 10,000
Hence, the break-even point is (1,000, 10,000).

What’s More
Determine the statements below if it is TRUE or FALSE. Write BUSINESS if the
statement is true and NOT BUSINESS if it is false.
1. Break-even point is the point where revenues equal the total of all expenses including
the cost of goods sold.
 2. Decreasing a company’s fixed expenses should reduce the break-even point.
3. Break-even analysis is useful for companies that sell products but it is not useful for
companies that provide services.

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4. When the total cost is lower than revenue, the level of sales is losing.
5. Rent, salaries of employees, loans, basic utilities and other necessary expenditures are
the variable cost.
6. Fixed cost is the cost necessary to keep the business running regardless of the sales
volume.
7. The cost of producing each product is the variable cost.
8. The point at which the business will neither earn a profit nor experience loss is break-
odd point.
9. One important factor in break-even analysis is the revenue.
10. In the formula, R = p ٠ x where r stands for the revenue, x is the number of units and p
for profit.

What I have Learned

In accounting, the breakeven point is calculated by dividing the fixed costs of

production by the price per unit minus the variable costs of production.
The breakeven point is the level of production at which the costs of production equal
the revenues for a product.
In investing, the breakeven point is said to be achieved when the market price of an
asset is the same as its original cost.

When TC > R, the value of P < 0 which implies that the business will incur loss. The
company earns a profit when TC > R.

Activity 1: WATCH and LEARN

In relation to our lesson on fixed cost which includes salaries of employees, etc., the
Division of Malaybalay City is delivering a learning modality that uses radio program on stations
dedicate to provide learning to learners as a form of distance education.
In line with this, may I request each one of you to watch RBI learning episode entitled
“SALARY, WAGE, INCOME, AND BENEFITS” and do the task that will be given to you during the
scheduled airing of the said episode.

A. Unscramble Me
Directions: Determine the word describe in each number.
1. Costs and expenses that change proportionately with the change ABLEAIRV
in volume are said to be _______.
2. The break-even point occurs where total __________ are equal to ESEUNVER
total costs.
3. A cost that is partly fixed and partly variable is referred to as a ____ cost. XEMID
4. Revenues minus variable costs equals the _______. TRIBUCONIONT
5. When calculating a product’s break-even point in units, the DIXEF
numerator is _______ costs.
B. Solve Me.
Directions: Solve the following problems . Show your solution.
1. From the following information, ascertain by how much the value of sales must be increased by the
company to break even.
Sales 3,000,000
Fixed Cost 150,000
Variable Cost 200,000

2. A firm sells a product at 35 pesos per unit. The variable cost for the product is 30pesos per unit and its
fixed costs is 70,000 pesos. What quantity of the product should the firm sell in order to break-even?
A. 1,500 unit B. 21,000 units C. 12,000 units D. 14,000 units
3. A printing company bears a variable cost of 33 pesos per unit and a fixed cost of Php450,000. The
number of books needed to be break-even is 37,500 units. Find the selling price per unit of the book.
A. Php45.00 B. Php50.00 C. Php25.00 D. Php65.00

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