Cost Price, Selling Price, Profit and Loss, Break-Even - Learner Notes-1
Cost Price, Selling Price, Profit and Loss, Break-Even - Learner Notes-1
Cost Price, Selling Price, Profit and Loss, Break-Even - Learner Notes-1
MATHEMATICAL
LITERACY
LEARNER NOTES
COST PRICE, SELLING PRICE,
PROFIT / LOSS, BREAK-EVEN
ANALYSIS
2023
COST PRICE, SELLING PRICE, PROFIT / LOSS, BREAK-EVEN
ANALYSIS
Cost price: The price at which goods are or have been bought by a merchant or retailer. It is
the total amount of money that it costs a manufacturer to produce a given
product or provide a given service.
The cost price consist of:
Production cost – cost in manufacturing the product e.g. labour, raw materials
Operating costs – cost involved in the daily running of the business e.g. rent, water,
Stationary
Selling Price: The price at which goods or services are sold by the seller to the buyer. The
market value of the product.
Profit: A financial gain, especially the difference between the selling price (income) and the
cost price (expenses). Income is bigger than the expenses.
Income > Expenses
Break-even point: Income = Expenses, no profit or loss is made. Where the income and
expenses graphs intercept.
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Percentage calculations:
If you have a fixed total for example a Question Paper is out of a total of 150 marks. The
maximum mark you can obtain is 150 marks, thus 100% is the maximum percentage mark.
BUT for example, in financial contexts you will get percentages of more than 100%.
Add a given percentage profit to the cost price to determine the selling price:
If a percentage profit or mark up of 66,67% is added on the cost price, what will the selling
price be?
Selling Price = R12 + 12 × (66,67 ÷ 100)
= R20,00
OR
If the selling price is R30 and the profit/mark up is 60%, calculate the cost price.
Selling price = R30
= Cost Price + Profit / Mark Up
= 100% + 60%
3
COMMON MISTAKE!
in terms of reverse percentage calculations:
If you test:
12× 1,6 = R19,20 WRONG!
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QUESTION 1
Bobby got the idea of selling biryani from his niece Janet who has her own
takeaway business in South Africa.
1.1 Janet uses the equation below to calculate her total cost:
Use the equation to determine the number of plates sold if the total cost
was R1 380,00. (4)
1.2 TABLE 1 below shows Janet's total cost and income from selling different
numbers of plates of biryani.
The income graph has already been drawn on the attached ANSWER SHEET.
Use TABLE 1 and the same grid on the ANSWER SHEET to draw another
line graph representing the cost of different numbers of plates of biryani. (3)
1.3 Determine the minimum number of plates of biryani that Janet must sell before
she starts making a profit. (2)
[09]
5
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QUESTION 2
Vusi Galeni decided to travel to The United States of America to watch a theatre production
in the iconic Broadway Theatre in New York.
Two of the most popular souvenirs bought there, are the Theatre binoculars and a Broadway
Theatre snow globe.
To manufacture the snow globes, they have a fixed cost of US$17 000 and a variable cost of
US$40 per snow globe.
The production cost for the binoculars is given by the following formula:
TABLE 2 below shows the production cost and income for selling the theatre binoculars (in
US dollars).
TABLE 2: Production cost and income for selling theatre binoculars (in US dollars).
Number of binoculars 0 100 400 A 800 1 000
Production cost 10 000 11 500 16 000 19 750 C 25 000
Income 0 5 000 B 32 500 40 000 50 000
Use TABLE 2 and the information above to answer the questions that follow.
2.2 The Broadway Souvenir shop stated that they will have a total income of
$175 000 if they sell 900 binoculars and 1 100 snow globes.
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2.3 The graph of the total income for selling the theatre binoculars is drawn on
ANSWER SHEET 2. On the same system of axes provided on ANSWER
SHEET 2, draw another line graph that represents the total production cost for
manufacturing the theatre binoculars. (4)
2.4 The following two line graphs shows the total production cost and total
income from selling snow globes.
Graph A
70 Graph B
60
50
40
30
20
10
0
0 200 400 600 800 1000
Number of snow globes
(a) Which graph represents the total production cost for the snow globes?
Give a brief explanation to justify your answer. (3)
(b) Determine the profit the Souvenir Shop makes if they sell 600 snow
globes. (3)
[20]
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ANSWER SHEET 2
QUESTION 2.3
50
ITB
40
Amount in thousands ($)
30
20
10
0
0 100 200 300 400 500 600 700 800 900 1000
Number of theatre binoculars
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QUESTION 3
3.1 Susan intends selling cups of Milo at the local taxi rank for extra money. Milo is a
nutritious supplementary drink developed to provide active people with key vitamins
and minerals.
ANNEXURE A shows the advertisement from her local store where she intends to
buy her stock.
3.1.1 Determine the unit price when purchasing Milo option 2. (3)
3.1.4 Susan decided to exclude the cost of water when calculating the cost price
per cup of Milo.
TABLE 3 below shows how Susan calculated the cost price of ONE cup
of Milo.
(b) Determine B, the amount of milk, in litres, used for ONE cup of
Milo. (2)
(c) Write down the value of C, the cost of 25 foam cups. (2)
(d) Show that the cost of ONE cup of Milo, D, is R7,29. (2)
3.1.5 Determine the selling price of ONE cup of Milo if Susan's intended
profit margin is 25%. (4)
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3.2 Susan started her business one month later and because of the price increase of
products, it then cost her R9,50 to make ONE cup of Milo. She calculated that the daily
fixed cost was R90,00 and she would be able to sell 100 cups of Milo per day. She will
sell the Milo at R12,50 per cup.
3.2.1 TABLE 4 shows the income from the sale of cups of Milo.
TABLE 4: INCOME FROM THE SALE OF CUPS OF MILO
Number of cups of
0 20 30 40 80 100
Milo (n)
Income in rand (R) 0 250 375 P 1 000 1 250
(b) Write down an equation that can be used to calculate the income. (2)
3.2.2 Susan uses the following formula to determine the cost price of the cups of
Milo.
Cost = R90,00 + R9,50 × n where n = number of cups of Milo
TABLE 5 shows the cost price for a number of cups of Milo.
TABLE 5: COST PRICE OF A NUMBER OF CUPS OF MILO
Number of cups of 0 20 30 Q 80 100
Milo (n)
Cost price in rand (R) 90 280 375 612,50 850 1 040
(3)
Calculate the value of Q in TABLE 5 above.
3.2.3 The graph on ANSWER SHEET 3 shows the total income for making up
to 100 cups of Milo. Use the information in TABLE 5 to draw another
graph representing the cost from the selling of up to 100 cups of Milo. (3)
3.2.4 Explain the meaning of the word break-even in the context of the
question.
(a) Verduidelik wat die woord gelykbreekpunt in die konteks van die
vraag beteken. (2)
(b) Determine the number of cups of Milo at the break-even point. (2)
[35]
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ANNEXURE A
QUESTION 3.1
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ANSWER SHEET 1
QUESTION 2.2.3
1300
Income
1200
1100
1000
900
800
Amount in rand
700
600
500
400
300
200
100
0
0 20 40 60 80 100
Number of cups of Milo
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