ABM 4 - Business Mathematics

Ratio and Proportion

● Ratio - a comparison of two quantities.

● The word “to” separates the numerator and denominator quantities.
12
- Ex. The ratio of 12 to 17 translates to 17
● Unit ratio - ratio with a denominator of 1.
● Numerator is called antecedent.
● Denominator is called consequent.
● Proportion - two ratios are equal.
● Means - the inside part of a ratio.
● Extremes - the outer parts of the ratio.

Finding the term in Proportion

Given: 𝑛: 3 = 10: 15

Step 1. Write the proportion in fraction form.

𝑛 10
3
= 15
Step 2. Multiply the extremes and then the means.
15 • 𝑛 = 3 • 10
Step 3. Divide the left and right sides.
15𝑛 30
15
= 15
−> 𝑛 = 2
Proportion. 2: 3 = 10: 15. Means & Extremes is equal to 30.

● Direct Proportion - As a quantity increases, the other quantity increases at the same rate and
vice versa.
- Ex. A worker paid by the hour will earn more if he works for more hours.
● Inverse Proportion - As a quantity increases, the other quantity decreases at the same rate
and vice versa.
- Ex. Five workers will require more time to finish a certain job compared to 10 workers
who will work on the same job.
● Partitive Proportion - A certain whole is divided into several shares following a certain ratio.
- Ex. Martin will give Php 1,070.00 to his 3 children in the ratio 5:3:2. How much will each
child get?

Word Problem #1: Chris earns Php 5,000.00 in 20 days. How much will he earn in 30 days?
5,000 𝑁 20𝑁 150,000
5, 000: 20 = 𝑁: 30 −> 20
= 30
−> 20
= 20
−> 𝑁 = 7, 500
Word Problem #2: Ann, Jane and May shared 360 stamps in the ratio of 3:4:5. How many stamps did
Ann get?
3 𝐴 12𝐴 1,080
3: 12 = 𝐴: 360 −> 12
= 360 −> 12 = 12 −> 𝐴 = 90
4 𝐽 12𝐽 1,440
4: 12 = 𝐽: 360 −> 12
= 360 −> 12 = 12 −> 𝐽 = 120
5 𝑀 12𝑀 1,800
5: 12 = 𝑀: 360 −> 12
= 360 −> 12 = 12 −> 𝑀 = 150
Word Problem #3: A farmer has enough feed for 72 ducks for 14 days. If he sells 16 ducks, how long
will the feeds last?
72 𝑁 56𝑁 1,008
72: 56 = 𝑁: 14 −> 56
= 14
−> 56
= 56
−> 𝑁 = 18
Word Problem #4: At the price of 3 guavas for P12.60, how many guavas can be bought for P37.80?
3 𝑁 12.60𝑁 113.4
3: 12. 60 = 𝑁: 37. 80 −> 12.60
= 37.80
−> 12.60
= 12.60
−> 𝑁 = 9
Word Problem #5: How much prize will each winner get if a cash prize of P45000 will have to be
divided in the ratio of 1:3:5?
1 𝑊1 9𝑊1 45,000
1: 9 = 𝑊1: 45, 000 −> 9
= 45,000 −> 9 = 9 −> 𝑊1 = 5, 000
3 𝑊2 9𝑊2 135,000
3: 9 = 𝑊2: 45, 000 −> 12
= 45,000 −> 9 = 9
−> 𝑊2 = 15, 000
5 𝑊3 9𝑊3 225,000
5: 9 = 𝑊3: 45, 000 −> 12
= 45,000 −> 9 = 9
−> 𝑊3 = 25, 000
Word Problem #6: If Trina works 20 hours, she earns Php 600. How much does she earn if she works
30 hours?
600 𝑁 20𝑁 18,000
600: 20 = 𝑁: 30 −> 20
= 30
−> 20
= 20
−> 𝑁 = 900
Word Problem #7: Forty liters of water is transferred into 3 containers in the ratio 1:3:4. How much
water is in each container?
1 𝐶1 8𝐶1 40
1: 8 = 𝐶1: 45, 000 −> 8
= 40
−> 8
= 8
−> 𝐶1 = 5
3 𝐶2 8𝐶2 120
3: 8 = 𝐶2: 45, 000 −> 8
= 40
−> 8
= 8
−> 𝐶2 = 15
5 𝐶3 8𝐶3 160
4: 8 = 𝐶3: 45, 000 −> 8
= 40
−> 8
= 8
−> 𝐶3 = 20
Word Problem #8: Two boxes of chocolates cost Php 180. How much do 7 boxes of chocolates cost?
180 𝑁 2𝑁 1,260
180: 2 = 𝑁: 7 −> 2
= 7
−> 2
= 2
−> 𝑁 = 630
Word Problem #9: If 1 out of 6 people buy a particular branded item, how many people can be
expected to buy this item in a community of 6,000 people?
1 𝑁 6𝑁 6,000
1: 6 = 𝑁: 6, 000 −> 6
= 6,000
−> 6
= 6
−> 𝑁 = 1, 000
Word Problem #10: A manufacturer knows that during an average product run, out of 1000 items
produced by a certain machine, 25 will be defective. If the machine produces 2, 030 items, how many
can be expected to be defective?
1,000 2,030 1,000𝑁 50,750
1, 000: 25 = 2, 030: 𝑁 −> 25
= 𝑁
−> 1,000
= 1,000
−> 𝑁 = 50. 75 𝑜𝑟 51
Word Problem #11: Eight tea bags are needed to make 5 liters of iced tea. How many tea bags are
needed to make 15 liters of iced tea?
8 𝑁 5𝑁 120
8: 5 = 𝑁: 15 −> 5
= 15
−> 5
= 5
−> 𝑁 = 24
Word Problem #12: The length (L) of the rectangle of fixed area varies inversely as the width (W). If
the length of the rectangle is 10 feet when the width is 4 feet, find the length of the rectangle when
the width is 8 feet.
10 8 8𝐿 40
10: 𝐿 = 8: 4 −> 𝐿
= 4
−> 8
= 8
−> 𝐿 = 5
Word Problem #13: If 7 chairs can be bought for Php 903, how many chairs can be bought with Php
1,548?
7 𝑁 903𝑁 10,836
7: 903 = 𝑁: 1, 548 −> 903
= 1548
−> 903
= 903
−> 𝑁 = 12
Word Problem #14: Mae bought 9 tickets to an international product exposition for Php 2,025. How
many tickets could she purchase with Php 3,825?
9 𝑁 2,025𝑁 34,425
9: 2025 = 𝑁: 3, 825 −> 2,025
= 3,825
−> 2,025
= 2,025
−> 𝑁 = 17
Word Problem #15: A grocery store is having a sale on wine, a package of 5 for Php 3,150, and the
same brand in a package of 9 for Php 5,535. Find each unit price and determine which is better to
buy?
3,150 5,535
3, 150: 5 = 5, 535: 9 −> 5
= 630 𝑣𝑠 9
= 615
Base, Rate, and Percentage

● Base (B) - the number of which a certain number of hundredths is taken

● Rate (R) - the number of hundredths taken
● Percentage (P) - the part of the whole
● Formulas:

𝑃𝑒𝑟𝑐𝑒𝑛𝑡𝑎𝑔𝑒 = (𝐵𝑎𝑠𝑒)(𝑅𝑎𝑡𝑒)
Ex. Fifty percent of 24 is what?
𝐺𝑖𝑣𝑒𝑛: 𝑅𝑎𝑡𝑒 = 50% 𝐵𝑎𝑠𝑒 = 24
𝑃 = (𝐵)(𝑅) = (24)(50%) = 12

𝑃𝑒𝑟𝑐𝑒𝑛𝑡𝑎𝑔𝑒
𝐵𝑎𝑠𝑒 = 𝑅𝑎𝑡𝑒
1
Ex. If I have P25 which represents 4
of my entire money, how much money do I have
in all?
1
𝐺𝑖𝑣𝑒𝑛: 𝑃𝑒𝑟𝑐𝑒𝑛𝑡𝑎𝑔𝑒 = 50% 𝑅𝑎𝑡𝑒 = 4
𝑃 𝑃25 4
𝐵 = 𝑅
= 1 = 𝑃25 𝑥 1
= 100
4

𝑃𝑒𝑟𝑐𝑒𝑛𝑡𝑎𝑔𝑒
𝑅𝑎𝑡𝑒 = 𝐵𝑎𝑠𝑒
Ex. What part of 400 is 50?
𝐺𝑖𝑣𝑒𝑛: 𝑃𝑒𝑟𝑐𝑒𝑛𝑡𝑎𝑔𝑒 = 50 𝐵𝑎𝑠𝑒 = 400
𝑃 50 1
𝑅= 𝐵
= 400
= 8

Ex.How many percent of P1.200 is P400?

𝐺𝑖𝑣𝑒𝑛: 𝑃𝑒𝑟𝑐𝑒𝑛𝑡𝑎𝑔𝑒 = 400 𝐵𝑎𝑠𝑒 = 1, 200
𝑃 400 1
𝑅= 𝐵
= 1,200
= 3
= 0. 333 = 33. 33%

● If it is asking for “part”, the answer is in a fraction form or whole number.

● If it is asking for “percent”, the answer is in a percent form..

Tips:
Percentage - associated with “is”
Base - associated with “of”
Rate - associated with % / decimal
To get decimal divide the percent to 100 (= negative exponent move the decimal to left)

Examples:
1. What is 30% of 250?
𝐺𝑖𝑣𝑒𝑛: 𝐵 = 250 𝑅 = 30% 𝑜𝑟 0. 30
𝑃 = (𝐵)(𝑅) = 250 𝑥 30% = 75
2. What is 120% of 45?
𝐺𝑖𝑣𝑒𝑛: 𝐵 = 45 𝑅 = 120% 𝑜𝑟 1. 2
𝑃 = (𝐵)(𝑅) = 45 𝑥 1. 20% = 54
 1
3. What number is equal to 30 2
% of 80?
1
𝐺𝑖𝑣𝑒𝑛: 𝐵 = 80 𝑅 = 30 2
% 𝑜𝑟 30. 5% 𝑜𝑟 0. 305
𝑃 = (𝐵)(𝑅) = 80 𝑥 30. 5% = 24. 4
4. 0.4% of 700 is equal to what number?
𝐺𝑖𝑣𝑒𝑛: 𝐵 = 700 𝑅 = 0. 4% 𝑜𝑟 0. 004
𝑃 = (𝐵)(𝑅) = 700 𝑥 0. 4% = 2. 8
2
5. How much is 5
of 90 =
2
𝐺𝑖𝑣𝑒𝑛: 𝐵 = 900 𝑅= 5
𝑜𝑟 0. 4
2
𝑃 = (𝐵)(𝑅) = 90 𝑥 5
= 36
6. Find 30% as great as 50% of 150?
𝐺𝑖𝑣𝑒𝑛: 𝐵 = 150 𝑅 = 30% 𝑜𝑟 0. 30 𝑎𝑛𝑑 50% 𝑜𝑟 0. 50
𝑃 = (𝐵)(𝑅) = 150 𝑥 30% 𝑥 50% = 22. 5
𝑂𝑅
𝑃 = (𝐵)(𝑅) = 30% 𝑥 50% = 0. 15
𝑃 = (𝐵)(𝑅) = 150 𝑥 0. 15 = 22. 5
7. 72 is what percent of 90?
𝐺𝑖𝑣𝑒𝑛: 𝐵 = 72 𝑃 = 90
𝑃 72
𝑅= 𝐵
= 90
(100) = 80%
8. What percent of 35 is 210?
𝐺𝑖𝑣𝑒𝑛: 𝐵 = 35 𝑃 = 210
𝑃 210
𝑅= 𝐵
= 35
(100) = 600%
9. 18 is what part of 60?
𝐺𝑖𝑣𝑒𝑛: 𝐵 = 60 𝑃 = 18
𝑃 18 3
𝑅= 𝐵
= 60
= 10
10. What part of 35 is 20?
𝐺𝑖𝑣𝑒𝑛: 𝐵 = 35 𝑃 = 20
𝑃 20 4
𝑅= 𝐵
= 35
= 7
11. What percent of 90 is 50% of 60%?
𝐺𝑖𝑣𝑒𝑛: 𝐵 = 60% 𝑅 = 50% 𝐺𝑖𝑣𝑒𝑛: 𝐵 = 90 𝑃 = 30
𝑃 = 𝐵𝑅 = 50% 𝑥 60% 𝑥 100 = 30 𝑃 30 100 1
𝑅= 𝐵
= 90
(100) = 3
= 33 3
12. 20% of what number is 45?
𝐺𝑖𝑣𝑒𝑛: 𝑃 = 45 𝑅 = 20% 𝑜𝑟 0. 2
𝑃 45
𝐵 = 𝑅
= 20%
= 225
13. 80 is equal to 10% of what number?
𝐺𝑖𝑣𝑒𝑛: 𝑃 = 80 𝑅 = 10% 𝑜𝑟 0. 1
𝑃 80
𝐵 = 𝑅
= 10%
= 800
1
14. 60 is 2
of what number?
1
𝐺𝑖𝑣𝑒𝑛: 𝑃 = 60 𝑅= 2
𝑜𝑟 0. 5
𝑃 60
𝐵 = 𝑅
= 2 = 150
5
 2
15. 9
as much as what number is 30?
2
𝐺𝑖𝑣𝑒𝑛: 𝑃 = 30 𝑅 = 9
𝑜𝑟 0. 5
𝑃 30
𝐵 = 𝑅
= 2 = 135
9

16. 50% of 80 is 20% of what number?

𝐺𝑖𝑣𝑒𝑛: 𝐵 = 80 𝑅 = 50% 𝐺𝑖𝑣𝑒𝑛: 𝑃 = 40 𝑅 = 20% 𝑜𝑟 0. 20
𝑃 = (𝐵)(𝑅) = 80 𝑥 50% = 40 𝑃 40
𝐵 = 𝑅
= 20%
= 200
17. RFS Metal Industries has 1,600 employees, 60% constitutes the production staff. How
many employees are in production?
𝐺𝑖𝑣𝑒𝑛: 𝐵 = 1, 600 𝑅 = 60% 𝑜𝑟 0. 6
𝑃 = (𝐵)(𝑅) = 1, 600 𝑥 60% = 960
18. A multi-billion company reduces its work force of 35,000 by 4.7%. How many
employees were laid off?
𝐺𝑖𝑣𝑒𝑛: 𝐵 = 35, 000 𝑅 = 4. 7% 𝑜𝑟 0. 047
𝑃 = (𝐵)(𝑅) = 35, 000 𝑥 4. 7% = 1, 645
19. Of the students of San Sebastian College, 3600 watched the NCAA Basketball
championship game. If 828 students watched the game, what percent watched the
game?
𝐺𝑖𝑣𝑒𝑛: 𝐵 = 3, 600 𝑃 = 828
𝑃 828
𝑅= 𝐵
= 3600
(100) = 23%
20. Payroll deductions comprise 35% of Reina’s gross income a month. If her deductions
total Php 6,860, what is her gross income?
𝐺𝑖𝑣𝑒𝑛: 𝑃 = 6, 860 𝑅 = 35% 𝑜𝑟 0. 35
𝑃 6,860
𝐵 = 𝑅
= 35%
= 19, 600
21. According to the Department of Labor and Employment’s (DOLE) report. 2.3 million
Filipinos, or 20% of the country’s workforce, were unemployed. How large was the
workforce?
𝐺𝑖𝑣𝑒𝑛: 𝑃 = 2, 300, 000 𝑅 = 20% 𝑜𝑟 0. 20
𝑃 2,300,000
𝐵 = 𝑅
= 20%
= 11, 500, 000

Buying and Selling

● Cost Price
- the price that a company or store has to pay for the goods it is going to sell
- the price that has to be spent to produce goods or services before any profit is added
- this is usually computed on a per unit basis
● Operating Cost
- the price (per unit) incurred relative to the production and sale of commodity
- additional expenses that have to be incurred by the class in the actual selling of the
banana cue
● Selling Price
- the price at which the commodity is sold per unit
- To compute for selling price:
𝑆𝑒𝑙𝑙𝑖𝑛𝑔 𝑃𝑟𝑖𝑐𝑒 = 𝐶𝑜𝑠𝑡 𝑃𝑟𝑖𝑐𝑒 + 𝑂𝑝𝑒𝑟𝑎𝑡𝑖𝑛𝑔 𝐶𝑜𝑠𝑡 + 𝑃𝑟𝑜𝑓𝑖𝑡 // 𝑆 = 𝐶 + 𝐸 + 𝑃
● Profit
- money earned after the cost price and the operating cost are accounted for after the
sale of commodity
● Mark-Up
- the difference between the selling price and the cost price sometimes referred to as
Margin or Gross Profit
- To compute for mark-up:
𝑀𝑎𝑟𝑘 – 𝑢𝑝 = 𝑆𝑒𝑙𝑙𝑖𝑛𝑔 𝑃𝑟𝑖𝑐𝑒 – 𝐶𝑜𝑠𝑡 𝑃𝑟𝑖𝑐𝑒 // 𝑀𝑈 = 𝑆 – 𝐶
- Ex. #1: Aling Ana would like to sell the little trinkets she purchased from Divisoria for
Php 12 each. If the operating cost is set at 25% of the cost and she would like to have a
15% profit on the cost of each item,
- Determine the mark – up for each trinket.
- Help Aling Ana determine the selling price for each trinket.
𝑀𝑈 = 𝑆 – 𝐶 𝑎𝑛𝑑 𝑆 = 𝐶 + 𝐸 + 𝑃,
𝑇𝑜 𝑓𝑖𝑛𝑑 𝑚𝑎𝑟𝑘 − 𝑢𝑝, 𝑠𝑖𝑛𝑐𝑒 𝑆𝑒𝑙𝑙𝑖𝑛𝑔 𝑝𝑟𝑖𝑐𝑒 𝑖𝑠 𝑛𝑜𝑡 𝑔𝑖𝑣𝑒𝑛, 𝑖𝑡 𝑓𝑜𝑙𝑙𝑜𝑤𝑠 𝑡ℎ𝑎𝑡;
𝑀𝑈 = 𝐸(𝐶) + 𝐶(𝑃) −> 12(0. 25) + 12(0. 15) = 4. 80
𝑇𝑜 𝑓𝑖𝑛𝑑 𝑆𝑒𝑙𝑙𝑖𝑛𝑔 𝑃𝑟𝑖𝑐𝑒:
𝑆𝑖𝑛𝑐𝑒 𝑀𝑈 = 𝑆 – 𝐶 𝑑𝑒𝑟𝑖𝑣𝑒, 𝑆 = 𝑀𝑈 + 𝐶
𝑆 = 4. 80 + 12 = 16. 8
- Ex. #2: A jacket which costs Php 1, 350 is being sold at Php 2, 025. What is the rate of
mark – up based on cost?
𝑀𝑎𝑟𝑘 − 𝑢𝑝 = 𝑆 – 𝐶
𝑀𝑈
𝑅𝑎𝑡𝑒 𝑜𝑓 𝑚𝑎𝑟𝑘 − 𝑢𝑝 𝑜𝑟 𝑀𝑅 = 𝐶
(100)
𝑀𝑈 = 2, 025 − 1, 350 = 675
675
𝑀𝑅 = 1,350
(100) = 50
(2,025 − 1,350)
𝑜𝑟 𝑀𝑅 = 1,350
(100) = 50
- Ex. 3#: Julia buys a notebook with a cost of Php 45. The rate of markup based on the
cost is 25%. Find the selling price and the mark up.
𝑀𝑈 = 𝐶𝑜𝑠𝑡 × 𝑀𝑎𝑟𝑘𝑢𝑝 𝑅𝑎𝑡𝑒
𝑀𝑈 = 45 × . 25 = 11. 25
𝑆 = 𝑀𝑈 + 𝐶
𝑆 = 11. 25 + 45 = 56. 25
- Ex. #4: Peter decides to impose a mark-up of Php 5 on each pen he sells to his
classmates and friends. This represents a 20% mark-up based on the selling price. Find
the cost and the selling price of the pens Peter sells.
𝑀𝑈
𝑆= 𝑀𝑅
5
𝑆= 20%
= 25
𝐶 = 𝑆 − 𝑀𝑈
𝐶 = 25 − 5 = 20
● Mark-on
- Increasing the prices that are already pegged for their commodities.
- 𝑀𝑎𝑟𝑘 – 𝑜𝑛 = 𝑃𝑒𝑎𝑘 𝑆𝑒𝑙𝑙𝑖𝑛𝑔 𝑃𝑟𝑖𝑐𝑒 – 𝑅𝑒𝑔𝑢𝑙𝑎𝑟 𝑃𝑟𝑖𝑐𝑒 // 𝑀𝑂 = 𝑃𝑆 – 𝑆
- Ex. 1: If the cost of galunggong is Php 90 per kilo with a 35% mark – up, what is its new
selling price with the additional increase of Php 10? By how much is the rate of mark –
up based on cost increased by adding Php 10 to the regular selling price of the
galunggong?
𝑀𝑈 = 0. 35 × 90 = 31. 50
𝑅𝑒𝑔𝑢𝑙𝑎𝑟 𝑆𝑒𝑙𝑙𝑖𝑛𝑔 𝑃𝑟𝑖𝑐𝑒 = 𝐶 + 𝑀𝑈 −> 90 + 31. 50 = 121. 50
𝑁𝑒𝑤 𝑆𝑒𝑙𝑙𝑖𝑛𝑔 𝑃𝑟𝑖𝑐𝑒 𝑎𝑓𝑡𝑒𝑟 𝑖𝑛𝑐𝑟𝑒𝑎𝑠𝑒 = 121. 50 + 10 = 131. 50
𝐶𝑜𝑚𝑝𝑢𝑡𝑒 𝑓𝑜𝑟 𝑅𝑎𝑡𝑒 𝑜𝑓 𝑚𝑎𝑟𝑘 − 𝑢𝑝 𝑖𝑛𝑐𝑟𝑒𝑎𝑠𝑒𝑑
𝑀𝑈+𝑀𝑂
𝐶
(100) = 46. 11%
46. 11 − 35 = 11. 11%
- Ex. #2: Yvette’s Flower Shop imposes a 45% mark-up on flowers delivered to them for
sale. During the All Saint’s Day, however, an additional mark-on of 25% of the regular
selling price is added on. Determine the unit price of 300 roses worth Php 15,000
delivered to Yvette’s Flower Shop during All Saints Day. How much is the selling price
of each rose during All Saint’s Day at this flower shop?
15,000
𝑈𝑛𝑖𝑡 𝑃𝑟𝑖𝑐𝑒 = 300
= 50
𝑀𝑈 = 50 × 0. 45 = 22. 5
𝑅𝑒𝑔𝑢𝑙𝑎𝑟 𝑆𝑒𝑙𝑙𝑖𝑛𝑔 𝑃𝑟𝑖𝑐𝑒 = 50 + 22. 5 = 72. 5
𝑀𝑎𝑟𝑘 − 𝑜𝑛 = 72. 5 × 0. 25 = 18. 125
𝑃𝑒𝑎𝑘 𝑆𝑒𝑙𝑙𝑖𝑛𝑔 𝑃𝑟𝑖𝑐𝑒 = 72. 5 + 18. 125 = 90. 625
● Mark - Down
- reduction in the original selling price
- the difference between the REGULAR SELLING PRICE and the SALE PRICE
- Note that the rate of mark-downs are always computed based on the selling price.
- It is possible that instead of making the business owner earn a positive profit, selling an
item on sale sometimes gives rise to a negative profit. In this case, the profit is said to
be a LOSS.
- Ex. #1: Some items which are usually sold for Php 150 are sold at 50% off during mall
sales and so the mark-down price is set at Php 75.
𝑀𝑎𝑟𝑘 𝐷𝑜𝑤𝑛 = 𝑂𝑙𝑑 𝑆𝑒𝑙𝑙𝑖𝑛𝑔 𝑃𝑟𝑖𝑐𝑒 − 𝑁𝑒𝑤 𝑆𝑒𝑙𝑙𝑖𝑛𝑔 𝑃𝑟𝑖𝑐𝑒
𝑁𝑒𝑤 𝑆𝑒𝑙𝑙𝑖𝑛𝑔 𝑃𝑟𝑖𝑐𝑒 = 150 × 0. 50 = 75
𝑀𝐷 = 150 − 75 = 75
BUYING AND SELLING PART 2 (TRADE DISCOUNTS & CASH DISCOUNT)
● Cost – purchase price of an article
● Initial markup – amount added to cost to arrive at the original selling price
● Additional markup – amounts added to original selling price to arrive at a new selling rice
● Markup cancellation – decrease in new selling price that doesn’t decrease below the original
selling price

Markup and Margin

● Margin
- sales minus the cost of goods sold
- markup based on sales
- addresses the profit as it relates to selling price
● Markup
- amount by which the cost of a product is increased in order to derive the selling price
- markup based on cost
- addresses the profit as it relates to cost price
● Markup Based on Cost
𝑆𝑎𝑙𝑒𝑠 𝑆𝑒𝑙𝑙𝑖𝑛𝑔 𝑃𝑟𝑖𝑐𝑒 ₱450 150%
𝐶𝑜𝑠𝑡 𝑜𝑓 𝐺𝑜𝑜𝑑𝑠 𝑆𝑜𝑙𝑑 (𝐶𝑜𝑠𝑡) ₱300 100%
𝐺𝑟𝑜𝑠𝑠 𝑃𝑟𝑜𝑓𝑖𝑡 (𝑀𝑎𝑟𝑘𝑢𝑝) ₱150 50%
𝑃
𝑅= 𝐵
, 𝑤ℎ𝑒𝑟𝑒 𝐵𝑎𝑠𝑒(𝐵) 𝑖𝑠 𝑡ℎ𝑒 𝐶𝑜𝑠𝑡 𝑎𝑛𝑑 𝑃𝑒𝑟𝑐𝑒𝑛𝑡𝑎𝑔𝑒 (𝑃) 𝑖𝑠 𝑆𝑆𝑃 𝑎𝑛𝑑 𝑀𝑈
𝑆𝑒𝑙𝑙𝑖𝑛𝑔 𝑃𝑟𝑖𝑐𝑒 (𝑃)
𝑆𝑒𝑙𝑙𝑖𝑛𝑔 𝑝𝑟𝑖𝑐𝑒 𝑎𝑠 % 𝑜𝑓 𝑐𝑜𝑠𝑡 (𝑅) = 𝐶𝑜𝑠𝑡 (𝐵)
450
= 300 = 1. 5(100) = 150%
𝑀𝑎𝑟𝑘𝑢𝑝 (𝑃)
𝑀𝑎𝑟𝑘𝑢𝑝 𝑎𝑠 % 𝑜𝑓 𝑐𝑜𝑠𝑡 (𝑅) = 𝐶𝑜𝑠𝑡 (𝐵)
150
= 300 = 0. 5(100) = 50%
● Markup Based on Selling Price
𝑆𝑎𝑙𝑒𝑠 𝑆𝑒𝑙𝑙𝑖𝑛𝑔 𝑃𝑟𝑖𝑐𝑒 ₱450 100%
𝐶𝑜𝑠𝑡 𝑜𝑓 𝐺𝑜𝑜𝑑𝑠 𝑆𝑜𝑙𝑑 (𝐶𝑜𝑠𝑡) ₱300 66. 67%
𝐺𝑟𝑜𝑠𝑠 𝑃𝑟𝑜𝑓𝑖𝑡 (𝑀𝑎𝑟𝑘𝑢𝑝) ₱150 33. 33%
𝑃
𝑅= 𝐵
, 𝑤ℎ𝑒𝑟𝑒 𝐵𝑎𝑠𝑒(𝐵) 𝑖𝑠 𝑡ℎ𝑒 𝑆𝑒𝑙𝑙𝑖𝑛𝑔 𝑃𝑟𝑖𝑐𝑒 𝑎𝑛𝑑 𝑃𝑒𝑟𝑐𝑒𝑛𝑡𝑎𝑔𝑒 (𝑃) 𝑖𝑠 𝑡ℎ𝑒 𝐶 𝑎𝑛𝑑 𝑀𝑈
𝐶𝑜𝑠𝑡 (𝑃)
𝐶𝑜𝑠𝑡 𝑎𝑠 % 𝑜𝑓 𝑆𝑒𝑙𝑙𝑖𝑛𝑔 𝑝𝑟𝑖𝑐𝑒 (𝑅) = 𝑆𝑒𝑙𝑙𝑖𝑛𝑔 𝑃𝑟𝑖𝑐𝑒 (𝐵)
300 2
= 450 = 3 (100) = 66. 67%
𝑀𝑎𝑟𝑘𝑢𝑝 (𝑃)
𝑀𝑎𝑟𝑘𝑢𝑝 𝑎𝑠 % 𝑜𝑓 𝑆𝑒𝑙𝑙𝑖𝑛𝑔 𝑃𝑟𝑖𝑐𝑒 (𝑅) = 𝑆𝑒𝑙𝑙𝑖𝑛𝑔 𝑃𝑟𝑖𝑐𝑒 (𝐵)
150 1
= 450
= 3 (100) = 33. 33%
● Converting Markup Based on Cost to Markup Based on Selling Price and vice versa
𝑅𝑎𝑡𝑒 𝐵𝑎𝑠𝑒𝑑 𝑜𝑛: 𝐶𝑜𝑠𝑡 𝑆𝑒𝑙𝑙𝑖𝑛𝑔 𝑃𝑟𝑖𝑐𝑒
𝑆𝑎𝑙𝑒𝑠 𝑆𝑒𝑙𝑙𝑖𝑛𝑔 𝑃𝑟𝑖𝑐𝑒 150% 100%
𝐶𝑜𝑠𝑡 𝑜𝑓 𝐺𝑜𝑜𝑑𝑠 𝑆𝑜𝑙𝑑 (𝐶𝑜𝑠𝑡) 100% 66. 67%
𝐺𝑟𝑜𝑠𝑠 𝑃𝑟𝑜𝑓𝑖𝑡 (𝑀𝑎𝑟𝑘𝑢𝑝) 50% 33. 33%

𝑀𝑈𝑐𝑜𝑠𝑡 𝐶𝑜𝑠𝑡 𝑅𝑎𝑡𝑒 = 𝑀𝑈𝑠𝑝 − 𝑆𝑆𝑃𝑠𝑝

𝑀𝑈𝑠𝑝 = 𝑆𝑃 𝑟𝑎𝑡𝑒
50% 1 𝐶𝑜𝑠𝑡 𝑅𝑎𝑡𝑒 = 100% − 33. 33% = 66. 67
𝑀𝑈𝑠𝑝 = 150%
= 3
(100) = 33. 33%
 ● Single Discount
- 𝑃 = (𝐵)(𝑅) −> 𝐷𝑖𝑠𝑐𝑜𝑢𝑛𝑡 = 𝐿𝑖𝑠𝑡 𝑃𝑟𝑖𝑐𝑒 × 𝐷𝑖𝑠𝑐𝑜𝑢𝑛𝑡 𝑅𝑎𝑡𝑒
- Ex. Compute the discount for an item with a list price of ₱1,250 to 15% discount. WHat
is its net voice price?
𝐷𝑖𝑠𝑐𝑜𝑢𝑛𝑡 = 𝐿𝑖𝑠𝑡 𝑃𝑟𝑖𝑐𝑒 × 𝐷𝑖𝑠𝑐𝑜𝑢𝑛𝑡 𝑅𝑎𝑡𝑒
𝐷 = ₱1, 250 × 15% = 187. 5
𝑁𝑒𝑡 𝐼𝑛𝑣𝑜𝑖𝑐𝑒 𝑃𝑟𝑖𝑐𝑒 = 𝐿𝑖𝑠𝑡 𝑃𝑟𝑖𝑐𝑒 − 𝐷𝑖𝑠𝑐𝑜𝑢𝑛𝑡
𝑁𝐼𝑃 = ₱1, 250 − 187. 5 = 1, 062. 50
● Series of Discount
- Compute the discount and the net invoice price if an item listed at ₱1,250 is given a
10% and 5% discount.
𝐹𝑖𝑟𝑠𝑡 𝐷𝑖𝑠𝑐𝑜𝑢𝑛𝑡 = 𝐿𝑖𝑠𝑡 𝑃𝑟𝑖𝑐𝑒 × 𝐹𝑖𝑟𝑠𝑡 𝐷𝑖𝑠𝑐𝑜𝑢𝑛𝑡
= ₱1, 250 × 10% = ₱125
𝐹𝑖𝑟𝑠𝑡 𝐵𝑎𝑙𝑎𝑛𝑐𝑒 = 𝐿𝑖𝑠𝑡 𝑃𝑟𝑖𝑐𝑒 − 𝐹𝑖𝑟𝑠𝑡 𝐷𝑖𝑠𝑐𝑜𝑢𝑛𝑡
= ₱1, 250 − 125 = ₱1, 125
𝑆𝑒𝑐𝑜𝑛𝑑 𝐷𝑖𝑠𝑐𝑜𝑢𝑛𝑡 = 𝐹𝑖𝑟𝑠𝑡 𝐷𝑖𝑠𝑐𝑜𝑢𝑛𝑡𝑒𝑑 𝑃𝑟𝑖𝑐𝑒 × 𝑆𝑒𝑐𝑜𝑛𝑑 𝐷𝑖𝑠𝑐𝑜𝑢𝑛𝑡
= ₱1, 125 × 5% = ₱56. 25
𝑁𝑒𝑡 𝐼𝑛𝑣𝑜𝑖𝑐𝑒 𝑃𝑟𝑖𝑐𝑒 = 𝐹𝑖𝑟𝑠𝑡 𝐷𝑖𝑠𝑐𝑜𝑢𝑛𝑡𝑒𝑑 𝑃𝑟𝑖𝑐𝑒 − 𝑆𝑒𝑐𝑜𝑛𝑑 𝐷𝑖𝑠𝑐𝑜𝑢𝑛𝑡
= ₱1, 125 − ₱56. 25 = ₱1, 068. 75
₱1,068.75
𝑁𝑒𝑡 𝐼𝑛𝑣𝑜𝑖𝑐𝑒 𝑃𝑟𝑖𝑐𝑒 𝑅𝑎𝑡𝑒 = ₱1,250
(100) = 85. 5%
𝑇𝑜𝑡𝑎𝑙 𝐷𝑖𝑠𝑐𝑜𝑢𝑛𝑡 = 𝐿𝑖𝑠𝑡 𝑃𝑟𝑖𝑐𝑒 − 𝑁𝑒𝑡 𝐼𝑛𝑣𝑜𝑖𝑐𝑒 𝑃𝑟𝑖𝑐𝑒
= ₱1, 250 − ₱1, 068. 75 = ₱181. 25
● Term of Sale/Purchase
- The rate of cash discount is shown under the terms of payment granted by the seller to
the buyer.
2 𝑛 3 2 𝑛 𝑛 𝑛
- Expressed as: 10
, 30
; 10
, 15
, 60
; 𝑒𝑜𝑚
, 45
.
- TO BE CONTINUED LOL…
-
BUYING AND SELLING PART 3 (PROFIT & LOSSES)

● Markdown
- If an item selling for ₱450 is marked to sell at ₱400, the markdown is the difference
between the original or and the new selling price
𝑀𝑎𝑟𝑘 𝐷𝑜𝑤𝑛 = 𝑂𝑙𝑑 𝑆𝑒𝑙𝑙𝑖𝑛𝑔 𝑃𝑟𝑖𝑐𝑒 − 𝑁𝑒𝑤 𝑆𝑒𝑙𝑙𝑖𝑛𝑔 𝑃𝑟𝑖𝑐𝑒
= ₱450 − ₱400 = ₱50
● Markdown Rate
- The markdown rate is generally expressed as a percent of the new reduced price.
- The new reduced price is the base.
𝑂𝑙𝑑 𝑆𝑒𝑙𝑙𝑖𝑛𝑔 𝑃𝑟𝑖𝑐𝑒 ₱450 112. 5%
𝑁𝑒𝑤 𝑅𝑒𝑑𝑢𝑐𝑒𝑑 𝑆𝑒𝑙𝑙𝑖𝑛𝑔 𝑃𝑟𝑖𝑐𝑒 ₱400 100%
𝑀𝑎𝑟𝑘𝑑𝑜𝑤𝑛 ₱150 12. 5%

𝑀𝑎𝑟𝑘𝑑𝑜𝑤𝑛
𝑀𝑎𝑟𝑘𝑑𝑜𝑤𝑛 𝑅𝑎𝑡𝑒 = 𝑁𝑒𝑤 𝑆𝑒𝑙𝑙𝑖𝑛𝑔 𝑃𝑟𝑖𝑐𝑒
₱50 1
= ₱400
= 8 (100) = 12. 5%
𝑂𝑙𝑑 𝑆𝑒𝑙𝑙𝑖𝑛𝑔 𝑃𝑟𝑖𝑐𝑒 𝑅𝑎𝑡𝑒 = 𝑀𝑎𝑟𝑘𝑑𝑜𝑤𝑛 𝑅𝑎𝑡𝑒 + 𝑁𝑒𝑤 𝑅𝑒𝑑𝑢𝑐𝑒𝑑 𝑆𝑃 𝑅𝑎𝑡𝑒
= 12. 5 + 100% = 112. 5%
Income Statement for a Trading Firm
● Income statement - financial statement showing results of operation
● Gross sales - total sales
● Net Sales - to get net sales, sales discount, and sales returns and allowances are deducted
from gross sales
● Cost of goods sold/cost of sales - how much the seller buys the item is the cost of the item
● Operating expenses - expenses incurred to run the business
● Other income - interest income and other incidental income the firm earns like rent income
● Other expense - interest expense or finance charges financial institutions charge firms for
their services
● Operating profit/loss - gross profit less operating expenses
● Net profit/loss - operating profit plus other income less other expense

● Breakeven Price
- When an item is given a selling price where the profit ends up being zero
- In this case, the selling price is simply equal to the total of the cost price and the
operating expenses
- To compute:
𝐵𝑟𝑒𝑎𝑘 𝐸𝑣𝑒𝑛 𝑃𝑟𝑖𝑐𝑒 = 𝐶𝑜𝑠𝑡 𝑃𝑟𝑖𝑐𝑒 + 𝑂𝑝𝑒𝑟𝑎𝑡𝑖𝑛𝑔 𝐶𝑜𝑠𝑡 // 𝐵𝐸𝑃 = 𝐶 + 𝐸
- Ex. #1: Carlo was able to buy a pair of shoes regularly priced at ₱3,500 for only ₱2,100.
What was the amount of the mark – down?
What was the rate of the mark- down?
𝑀𝐷 = ₱3, 500 − ₱2, 100 = ₱1, 400
₱1,400
𝑀𝐷𝑅 = ₱2,100
(100) = 66. 67%
- Ex. #2: During the Midnight Madness Sale, a board game regularly priced at Php 8,500
was sold at 55% discount. The cost of the board game is Php 3,450 and expenses are
14% of the regular selling price.
a. What was the amount of the mark – down?
b. What was the loss made on the sale?
a.
𝑀𝐷 = ₱8, 500 × 55% = ₱4, 675
100% − 55% = 45%, 𝑤ℎ𝑖𝑐ℎ 𝑖𝑠 𝑡ℎ𝑒 𝑠𝑎𝑙𝑒 𝑝𝑟𝑖𝑐𝑒 𝑟𝑎𝑡𝑒 𝑜𝑓 𝑡ℎ𝑒 𝑠𝑒𝑙𝑙𝑖𝑛𝑔 𝑝𝑟𝑖𝑐𝑒
𝑆𝑎𝑙𝑒 𝑃𝑟𝑖𝑐𝑒 = ₱8, 500 × 45% = ₱3, 825 or;
𝑆𝑎𝑙𝑒 𝑃𝑟𝑖𝑐𝑒 = 𝑅𝑒𝑔𝑢𝑙𝑎𝑟 𝑃𝑟𝑖𝑐𝑒 − 𝑀𝐷
= ₱8, 500 − ₱4, 675 = ₱3825
b.
𝑇𝑜𝑡𝑎𝑙 𝐶𝑜𝑠𝑡 = ₱3, 450 + 8, 500(0. 14) = ₱4, 640
𝐿𝑜𝑠𝑠 = 𝐶𝑜𝑠𝑡 − 𝑆𝑎𝑙𝑒 𝑃𝑟𝑖𝑐𝑒
= ₱4, 640 − ₱3, 825 = ₱815
𝑇ℎ𝑒 𝑠𝑎𝑙𝑒 𝑝𝑟𝑖𝑐𝑒 𝑖𝑠 𝑙𝑜𝑤𝑒𝑟 𝑡ℎ𝑎𝑛 𝑡ℎ𝑒 𝑐𝑜𝑠𝑡 𝑠𝑜 𝑡ℎ𝑒𝑦 𝑙𝑜𝑠𝑡 ₱815.