Contents

## Formulas

Effective Cost Price = C.P. + Overhead expenses

S.P. = Effective C.P. + Profit

S.P. = Effective C.P. – Loss

C.P. = S.P. – Profit

C.P. = S.P. + Loss

## Illustrative Examples

**Example :** Compute the missing entries in the following table ( where ever possible) :

Cost Price(C.P.) |
Overhead expenses |
Selling Price |
Profit |
Loss |

(i) Rs 550 |
Rs 60 |
– |
Rs 85 |
– |

(ii) Rs 9000 |
Rs 200 |
– |
– |
Rs 500 |

(iii) Rs 34000 |
Rs 2000 |
Rs 39000 |
– |
– |

(iv) Rs 850 |
Rs 30 |
– |
Rs 50 |
– |

(v) Rs 1070 |
Rs 70 |
– |
– |
Rs 70 |

Solution.

(i) We have, C.P. = Rs 550 and Overhead expenses Rs 60.

Effective cost price = Rs (550 + 60) = Rs 610.

Now,

Profit = S.P. — Effective C.P.

=> S.P. = Effective C.P. + Profit

=> S.P. = Rs (610 + 85) [ Profit = Rs 85 (given) ]

S.P. = Rs 695

(ii) We have, C.P. = Rs 9000, Overhead expenses = Rs 200 and Loss = Rs 500. Now,

Effective cost price ( E.C.P.) = C.P. + Overhead expenses

Effective cost price ( E.C.P.) = Rs ( 9000 + 200 ) = Rs 9200

We know that

Loss = E.C.P. – S.P.

S.P. = E.C.P. – Loss

= Rs(9200—500) = Rs 8700

(iii) We have, C.P. = Rs 34000, Overhead expenses = Rs 2000 and S.P. = Rs 39000.

E.C.P. = C.P. + Overhead expenses

E.C.P. = Rs(34000 + 2000) = Rs 36000

We have,

S.P. = Rs 39000

Clearly, E.C.P. < S.P. Therefore, there will be profit given by

Profit = S.P. — E.C.P. = Rs( 39000—36000) = Rs 3000.

(iv) We have, C.P. = Rs 850, Overhead expenses = Rs 30 and Profit = Rs 50. Now,

E.C.P. = C.P. + Overhead expenses = Rs (850 + 30) = Rs 880,

It is given that there is profit of Rs 50.

S.P. = E.C.P. + Profit = Rs ( 880 + 50) = Rs 930.

(v) We have, C.P. = Rs 1070, Overhead expenses = Rs 70 and Loss = Rs 70.

E.C.P. = C.P. + Overhead expenses = Rs( 1070 + 70) = Rs 1140.

It is given that there is loss of Rs 70.

S.P. = E.C.P. — Loss = Rs( 1140—70) = Rs 1070

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