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Session P & L

P & L – I

Profit and loss is one of the most significant topics for CAT and other management entrance exams.Though appearance of questions from the topic in CAT has been sporadic, in other management entranceexams, questions from this area have featured on a regular basis.

Key concepts discussed:

Cost price of an article is the price at which the article is bought.

• Selling price of an article is the price at which the article is sold.

• Marked price of an article is the lable or list price of the article.

• Profit/Loss is the difference between the selling price and the cost price. If the difference is positive,

it is called profit; and if is negative, it is called loss.

•

Profit /Loss

Pr ofit /Loss percentage 100CP= ×

• Margin is the profit as a percentage of SP.

• Discount is the reduction made on the marked price.

• Mark-up is the difference between the list price and the cost price.

Highlight: This session deals with questions which are based on the elementary concepts of P & L. Mostof the questions in the session are of easy to moderate difficulty level.

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SessionP & L

The questions discussed in the session are given below along with their source.

Q1. A dealer offers a cash discount of 20% and still makes a profit of 20%, when he further allows16 articles to a dozen to a particularly sticky bargainer. How much percent above the cost pricewere his wares listed?

(a) 100% (b) 80% (c) 75% (d)2

66 %

3(CAT 1994)

Q2. Two-third of a consignment was sold at a profit of 5% and the remainder at a loss of 2%. If the totalprofit was Rs. 400, the value of the consignment (in rupees)(a) 20,000 (b) 15,000 (c) 12,000 (d) 10,000

(FMS 2006)

Q3. A dealer sold a radio at a loss of 2.5%. Had he sold it for Rs. 100 more, he would have gained 71

2%.

In order to gain 121

2 %, he should sell it for:

(a) Rs. 850 (b) Rs. 925 (c) Rs. 1080 (d) Rs. 1125(FMS 2006)

DIRECTION for Question 4: The question is followed by two statements, I and II. Mark the answer as:(a) if the question can be answered with the help of statement I alone.(b) if the question can be answered with the help of statement II alone.(c) if both statement I and statement II are needed to answer the question.(d) if the question cannot be answered even with the help of both the statements.

Q4. What is the profit percentage?I. The cost price is 80% of the selling price.II. The profit is Rs.50.

(CAT 1995)

Q5. A dealer buys dry fruits at Rs. 100, Rs. 80 and Rs. 60 per kilogram. He mixes them in the ratio3 : 4 : 5 by weight, and sells at a profit of 50%. At what price per kilogram does he sell the dry fruit?(a) Rs. 80 (b) Rs. 100 (c) Rs. 95 (d) None of these

(CAT 1997)

Q6. A farmer bought 749 sheep. He sold 700 of them for the price paid for the 749 sheep. The remaining49 sheep were sold at the same price per head as the other 700. Based on the cost, the percentgain on the entire transaction is:(a) 6.5 (b) 6.75 (c) 7.0 (d) 7.5

(FMS 2010)