Business Math
Grade 11 ABM
Profit or Loss
Mark 8:36
For what does it profit
a man to gain the
whole world and
forfeit his soul?
Objectives:
At the end of this lesson, the learner should be able to:
1. Differentiate profit from loss
2. Illustrate how profit is obtained and how to avoid loss
in a given
transaction
3. Create a small business plan and indicate the
materials, expenses, and how your business operates.
4
Lesson 4 Profit or Loss
PROFIT
Profit is the amount of money left after all the
costs and expenses had been deducted from the
earnings generated. It is the difference between
the sales and the total cost, provided that the
sales are greater than the cost.
,
where 5
Sales refers to the amount being earned in the
business.
Cost refers to the price of the product sold or
service rendered. This includes some other
expenses.
Expenses refer to the operating expenses
(administrative and selling expenses), and
financial expenses (interest and other finance
charges).
6
Example:
Adriana sells crystal infinity bracelets to earn extra
cash. She sells them for each. In producing one
bracelet, she spends for the needed materials. How
much is her profit if she was able to sell 21 bracelets?
Solution:
Sales:
Cost:
7
Practice Exercise:
1. Erna earned a total of in her carinderia.
Looking at her notebook, she noted that she has
spent a total of on the same day to cover all the
ingredients and other things she used for her
store. Determine her profit for the day, if there’s
any.
8
Loss
Loss occurs when the cost and expenses
exceed the sales. It is the difference between
the total cost and the earnings generated,
provided that the cost is greater than the sales.
◦ ,
◦ where
9
Example:
Emma plans to sell customized bags in an upcoming
bazaar. To create one bag, she has to spend for the
materials, and she will sell it for . To participate in the
bazaar, she has to pay participation and rental fees
totaling . If she was able to create 130 bags, and she
believes she can sell them all, should she participate
in the bazaar?
Solution:
Sales: Cost:
Since Emma will incur a loss, it would be best for her 10
Practice Exercise:
1. A small sari-sari store earned a total of
last month. On the other hand, its expenses
included for groceries and for electricity.
How much was the profit, if there’s any?
11
Break-even Point
Break-even Point is the point where a
business neither makes a profit or loss. This
occurs when the total sales generated is
equal to the total cost incurred. Thus, the
profit or loss is
To determine the number of units to break-
even, you can assume that:
You can let x represent the number of units
to break-even. 12
Example:
A company sells tablets for . If the cost to
produce one tablet is , and the company has a
total fixed cost of , determine the company’s
breakeven point.
Solution:
Let x be the number of tablets sold. Then,
Thus, the breakeven point is 30 tablets.
13
Example:
A company sells tablets for . If the cost to
produce one tablet is , and the company has a
total fixed cost of , determine the company’s
breakeven point.
Solution:
Let x be the number of tablets sold. Then,
Thus, the breakeven point is 30 tablets.
14
Daily Reminder:
Life is like a business, full of
Profit and Losses. With every
loss, we grow stronger.
Strong enough to make new
profits.
Assessment:
I. Directions: Read each statement and determine whether
the following statement shows a profit or loss situation. Write
P for profit, and L for loss.
_________ 1. Benn bought a pen at each and sold it for .
__________ 2. A banana cue vendor gains for selling it at per
stick.
__________ 3. The cost of 10 pieces personalized calendar is ,
and it was sold for each.
__________ 4. Alyssa bought a scientific calculator at . When a
new and upgraded model was released after two months, she
sells her scientific calculator for to buy a new one.
__________ 5. Ann bought a memory card at and decided to
sell it to her sister for .
16
Assessment:
II. Directions: Solve each of the following problems.
1. A local bookstore earned a total of for the day. If the
expenses incurred for today reached , determine the
bookstore’s profit/ loss?
2. Samuel was able to generate revenue of from his car wash
business. If his profit was , how much was the expense he
incurred?
17
Assessment:
3. A manufacturing company had a total revenue of for the month of July. The
expense that the company incurred for the said month can be seen below.
Costs of goods sold :
Operating Costs :
Depreciation Costs :
Taxes :
Did the company earn profit or incur a loss? How much is the profit/loss?
4. A customized notebook has a unit cost of and a unit price of . How much is
the fixed cost if the breakeven point is 143 notebooks?
5. The unit cost of producing one box of chocolates is , while its unit price is .
There is a fixed cost of that includes utilities and rent expenses.
a. How many boxes of chocolates should be sold to have a profit of ?
b. If 137 boxes of chocolates are sold, how much is the profit
earned/loss incurred?
c. How many boxes of chocolates should be sold to breakeven?
18
Assessment:
6. A local souvenir shop sells two kinds of shirts. The first kind of
shirt sells for , while the second one sells for . If the unit cost of
the shirts are and , respectively, and the shop has a fixed cost
of , determine the profit/loss if 51 of the first shirt, and 47 of the
second shirt are sold.
7. A retail store sells shoes for per pair. For the month of August,
it was able to sell 125 pairs of shoes. The expenses that the store
incurred for the said month can be seen below.
Costs of goods sold :
Operating Costs :
Depreciation Costs :
Taxes :
Did the store earn profit or incur a loss? How much is the
19
profit/loss?
Performance Task
Performance Task: Written Report
◦ Make a short business plan. Use long bond paper with 1
inch margin on each side.
◦ Suppose you are to start a business. Relevant to the
current situation (Global Pandemic).
◦ Make a list of the materials, and other expenses needed
by your business. Show how your business operates,
how can you earn profit, and how to avoid loss in your
business.
◦ Submit next week. 20
Rubrics:
◦ Content (30%)
Able to show organize and detailed plan; and is
relevant to the present situation.
◦ Presentation (30%)
Able to show how to earn profit, and avoid loss.
◦ Aesthetics (25%)
Using of creative ideas.
◦ Submission (15%)
21