Ramona S.

Trillana High School

SENIOR HIGH DEPARTMENT

Business
Mathematics
for Accountancy, Business, and
Management (ABM) Learners

Mr. Carlo T. Estrella

Preliminary

How much will be the net price

and the trade discount availed
by a customer who purchases
a dozen of frozen products at a
unit price of ₱50.00 with a
discount rate of 5%?
Preliminary To compute the trade discount
𝑇𝑟𝑎𝑑𝑒 𝐷𝑖𝑠𝑐𝑜𝑢𝑛𝑡 = 𝑂𝑟𝑖𝑔𝑖𝑛𝑎𝑙 𝑃𝑟𝑖𝑐𝑒 ∗ 𝐷𝑖𝑠𝑐𝑜𝑢𝑛𝑡 𝑟𝑎𝑡𝑒
How much will be 𝑇𝑟𝑎𝑑𝑒 𝐷𝑖𝑠𝑐𝑜𝑢𝑛𝑡 = 50 ∗ 0.05
the net price and 𝑻𝒓𝒂𝒅𝒆 𝑫𝒊𝒔𝒄𝒐𝒖𝒏𝒕 = PHP 𝟐. 𝟓𝟎
the trade
The net price of the frozen product is
discount availed
𝑁𝑒𝑡 𝑃𝑟𝑖𝑐𝑒 = 𝑂𝑟𝑖𝑔𝑖𝑛𝑎𝑙 𝑃𝑟𝑖𝑐𝑒 − 𝑇𝑟𝑎𝑑𝑒 𝐷𝑖𝑠𝑐𝑜𝑢𝑛𝑡
by a customer 𝑁𝑒𝑡 𝑃𝑟𝑖𝑐𝑒 = 50 − 2.50
who purchases a 𝑵𝒆𝒕 𝑷𝒓𝒊𝒄𝒆 = 𝑷𝑯𝑷 𝟒𝟕. 𝟓𝟎
dozen of frozen
products at a unit For 1 dozen of frozen products
price of ₱50.00 2.50𝑥12 = 𝑷𝑯𝑷 𝟑𝟎. 𝟎𝟎
with a discount
rate of 5%?
Objectives
Learning Competencies:
✓Differentiate profit from loss
✓Illustrate how profit is obtained
and how to avoid loss in a given
transaction.
Lesson
Analyze the 3 cases
Case 1 Case 2 Case 3

Net Sales: ₱ 1,000 Net Sales: ₱ 1,000 Net Sales: ₱ 1,000

Less: Cost 500 Less: Cost 1,200 Less: Cost 1,000
Profit ₱ 500 Profit (₱ 200) Profit ₱ 0

Profit Loss Break-even

situation situation situation
 GROSS SALES
Refers to the total sales.
 NET SALES
It is the amount collected from
the sale of goods after
deductions such as discounts
or refunds are made.
Income Statement Format
Net Sales ₱ xxxxx
Less: Variable xxx
Costs ₱ xxxx
Gross Profit xxxx
Less: Fixed Cost ₱ xxxx
Net Profit (Loss) ========
 VARIABLE COSTS
It is the amount paid for raw
materials or ingredients
needed to produce a product
or a cost of a product
intended for resale.
 FIXED COSTS
It is the other expenses that
might incur in opening a
business (rent, salary,
insurance, loan, office, store
supplies and etc.)
 Example
Susan sells sacks of rice with free delivery to her
customers. She buys her supply of rice from a rice trader
at ₱ 2,000.00 per sack. She sells it to her customers at a
price with 20% mark-up based on cost. Susan rents a store
space (inclusive of water and light) near the public
market for ₱5,000 a month. During a month of operation,
she also incurs gasoline expenses of ₱2,000.00 and pays
wages of ₱3,000 to her driver. How much is the profit or
loss if during the month Susan was able to sell 50 sacks of
rice?
 Example STEP 1. identify and label all the information
needed to solve the problem
Susan sells sacks of rice with free
delivery to her customers. She
buys her supply of rice from a 𝑉𝑎𝑟𝑖𝑎𝑏𝑙𝑒 𝑐𝑜𝑠𝑡 𝑝𝑒𝑟 𝑠𝑎𝑐𝑘 𝑜𝑓 𝑟𝑖𝑐𝑒 = ₱ 2,000
rice trader at ₱ 2,000.00 per sack.
She sells it to her customers at a
𝐹𝑖𝑥𝑒𝑑 Costs of Business=₱ 5, 000 (rent),
price with 20% mark-up based on ₱ 2, 000 (gasoline),
cost. Susan rents a store space
(inclusive of water and light) ₱ 3, 000 (wages),
near the public market for ₱5,000
a month. During a month of
operation, she also incurs
gasoline expenses of ₱2,000.00
and pays wages of ₱3,000 to her
driver. How much is the profit or
loss if during the month Susan
was able to sell 50 sacks of rice?
 Example STEP 2. Compute the selling price of the
product.
Susan sells sacks of rice with free
delivery to her customers. She
buys her supply of rice from a 𝑀𝑎𝑟𝑘 − 𝑢𝑝 = 𝐶𝑜𝑠𝑡 𝑥 𝑑𝑒𝑠𝑖𝑟𝑒𝑑 𝑚𝑎𝑟𝑘 − 𝑢𝑝 𝑟𝑎𝑡𝑒
rice trader at ₱ 2,000.00 per sack. = ₱ 2,000 x 0.20
She sells it to her customers at a
price with 20% mark-up based on 𝑴𝒂𝒓𝒌 − 𝒖𝒑 = ₱ 400
cost. Susan rents a store space
(inclusive of water and light)
near the public market for ₱5,000 𝑆𝑒𝑙𝑙𝑖𝑛𝑔 𝑃𝑟𝑖𝑐𝑒 = 𝐶𝑜𝑠𝑡 + 𝑀𝑎𝑟𝑘 − 𝑢𝑝
a month. During a month of
operation, she also incurs
=₱ 2,000 + ₱ 400
gasoline expenses of ₱2,000.00 𝑺𝒆𝒍𝒍𝒊𝒏𝒈 𝑷𝒓𝒊𝒄𝒆 = ₱ 2,400
and pays wages of ₱3,000 to her
driver. How much is the profit or
loss if during the month Susan
was able to sell 50 sacks of rice?
 Example STEP 3. Compute the net sales by multiplying
the quantity sold by its selling price.
Susan sells sacks of rice with free
delivery to her customers. She 𝑁𝑒𝑡 𝑆𝑎𝑙𝑒𝑠 = 𝑄𝑢𝑎𝑛𝑡𝑖𝑡𝑦 𝑠𝑜𝑙𝑑 ∗ 𝑆𝑒𝑙𝑙𝑖𝑛𝑔 𝑃𝑟𝑖𝑐𝑒
buys her supply of rice from a
rice trader at ₱ 2,000.00 per sack. = 50 𝑥 ₱2,400
She sells it to her customers at a
price with 20% mark-up based on
𝑵𝒆𝒕 𝑺𝒂𝒍𝒆𝒔 = ₱120,000
cost. Susan rents a store space
(inclusive of water and light) STEP 4. Identify and compute the variable
near the public market for ₱5,000
a month. During a month of cost f sales.
operation, she also incurs
gasoline expenses of ₱2,000.00 𝑉𝑎𝑟𝑖𝑎𝑏𝑙𝑒 𝐶𝑜𝑠𝑡 = 𝑄𝑢𝑎𝑛𝑡𝑖𝑡𝑦 𝑆𝑜𝑙𝑑 ∗ 𝑉𝑎𝑟𝑖𝑎𝑏𝑙𝑒 𝑐𝑜𝑠𝑡/𝑢𝑛𝑖𝑡
and pays wages of ₱3,000 to her
driver. How much is the profit or = 50 ∗ ₱2,000
loss if during the month Susan 𝑽𝒂𝒓𝒊𝒂𝒃𝒍𝒆 𝑪𝒐𝒔𝒕 = ₱𝟏𝟎𝟎, 𝟎𝟎𝟎
was able to sell 50 sacks of rice?
 Example STEP 5. Identify and compute the total fixed
costs.
Susan sells sacks of rice with free
delivery to her customers. She
buys her supply of rice from a
rice trader at ₱ 2,000.00 per sack. ₱5,000 𝑟𝑒𝑛𝑡
She sells it to her customers at a +₱2,000 𝑔𝑎𝑠𝑜𝑙𝑖𝑛𝑒
price with 20% mark-up based on
cost. Susan rents a store space ₱3,000 𝑤𝑎𝑔𝑒𝑠
(inclusive of water and light)
near the public market for ₱5,000
𝑭𝒊𝒙𝒆𝒅 𝑪𝒐𝒔𝒕 = ₱𝟏𝟎, 𝟎𝟎𝟎
a month. During a month of
operation, she also incurs
gasoline expenses of ₱2,000.00
and pays wages of ₱3,000 to her
driver. How much is the profit or
loss if during the month Susan
was able to sell 50 sacks of rice?
 Example STEP 6. Use simple income statement to
compute the profit or loss.
Susan sells sacks of rice with free
delivery to her customers. She Net Sales ₱ 120,000
buys her supply of rice from a
rice trader at ₱ 2,000.00 per sack.
She sells it to her customers at a
Less: Variable Costs 100,000
price with 20% mark-up based on
cost. Susan rents a store space
Gross Profit ₱ 20,000
(inclusive of water and light)
near the public market for ₱5,000
Less: Fixed Profit 10,000
a month. During a month of
operation, she also incurs Net Profit ₱ 10,000
gasoline expenses of ₱2,000.00
and pays wages of ₱3,000 to her Conclusion: A net profit of ₱10,000 is
driver. How much is the profit or
loss if during the month Susan
gained in this period because the net
was able to sell 50 sacks of rice? sales made is greater than the costs
incurred in the business.
 Example
Susan sells sacks of rice with free delivery to her
customers. She buys her supply of rice from a rice trader
at ₱ 2,000.00 per sack. She sells it to her customers at a
price with 20% mark-up based on cost. Susan rents a store
space (inclusive of water and light) near the public
market for ₱5,000 a month. During a month of operation,
she also incurs gasoline expenses of ₱2,000.00 and pays
wages of ₱3,000 to her driver. How much is profit or loss if
during the month, Susan was able to sell 20 sacks of rice?
 Example STEP 1. identify and label all the information
needed to solve the problem
Susan sells sacks of rice with free
delivery to her customers. She
buys her supply of rice from a 𝑉𝑎𝑟𝑖𝑎𝑏𝑙𝑒 𝑐𝑜𝑠𝑡 𝑝𝑒𝑟 𝑠𝑎𝑐𝑘 𝑜𝑓 𝑟𝑖𝑐𝑒 = ₱ 2,000
rice trader at ₱ 2,000.00 per sack.
She sells it to her customers at a
𝐹𝑖𝑥𝑒𝑑 Costs of Business=₱ 5, 000 (rent),
price with 20% mark-up based on ₱ 2, 000 (gasoline),
cost. Susan rents a store space
(inclusive of water and light) ₱ 3, 000 (wages),
near the public market for ₱5,000
a month. During a month of
operation, she also incurs
gasoline expenses of ₱2,000.00
and pays wages of ₱3,000 to her
driver. How much is profit or loss if
during the month, Susan was
able to sell 20 sacks of rice?
 Example STEP 2. Compute the selling price of the
product.
Susan sells sacks of rice with free
delivery to her customers. She
buys her supply of rice from a 𝑀𝑎𝑟𝑘 − 𝑢𝑝 = 𝐶𝑜𝑠𝑡 𝑥 𝑑𝑒𝑠𝑖𝑟𝑒𝑑 𝑚𝑎𝑟𝑘 − 𝑢𝑝 𝑟𝑎𝑡𝑒
rice trader at ₱ 2,000.00 per sack. = ₱ 2,000 x 0.20
She sells it to her customers at a
price with 20% mark-up based on 𝑴𝒂𝒓𝒌 − 𝒖𝒑 = ₱ 400
cost. Susan rents a store space
(inclusive of water and light)
near the public market for ₱5,000 𝑆𝑒𝑙𝑙𝑖𝑛𝑔 𝑃𝑟𝑖𝑐𝑒 = 𝐶𝑜𝑠𝑡 + 𝑀𝑎𝑟𝑘 − 𝑢𝑝
a month. During a month of
operation, she also incurs
=₱ 2,000 + ₱ 400
gasoline expenses of ₱2,000.00 𝑺𝒆𝒍𝒍𝒊𝒏𝒈 𝑷𝒓𝒊𝒄𝒆 = ₱ 2,400
and pays wages of ₱3,000 to her
driver. How much is profit or loss if
during the month, Susan was
able to sell 20 sacks of rice?
 Example STEP 3. Compute the net sales by multiplying
the quantity sold by its selling price.
Susan sells sacks of rice with free
delivery to her customers. She 𝑁𝑒𝑡 𝑆𝑎𝑙𝑒𝑠 = 𝑄𝑢𝑎𝑛𝑡𝑖𝑡𝑦 𝑠𝑜𝑙𝑑 ∗ 𝑆𝑒𝑙𝑙𝑖𝑛𝑔 𝑃𝑟𝑖𝑐𝑒
buys her supply of rice from a
rice trader at ₱ 2,000.00 per sack. = 20 𝑥 ₱2,400
She sells it to her customers at a
price with 20% mark-up based on
𝑵𝒆𝒕 𝑺𝒂𝒍𝒆𝒔 = ₱𝟒𝟖, 𝟎𝟎𝟎
cost. Susan rents a store space
(inclusive of water and light) STEP 4. Identify and compute the variable
near the public market for ₱5,000
a month. During a month of cost f sales.
operation, she also incurs
gasoline expenses of ₱2,000.00 𝑉𝑎𝑟𝑖𝑎𝑏𝑙𝑒 𝐶𝑜𝑠𝑡 = 𝑄𝑢𝑎𝑛𝑡𝑖𝑡𝑦 𝑆𝑜𝑙𝑑 ∗ 𝑉𝑎𝑟𝑖𝑎𝑏𝑙𝑒 𝑐𝑜𝑠𝑡/𝑢𝑛𝑖𝑡
and pays wages of ₱3,000 to her
driver. How much is profit or loss if = 20 ∗ ₱2,000
during the month, Susan was
able to sell 20 sacks of rice?
𝑽𝒂𝒓𝒊𝒂𝒃𝒍𝒆 𝑪𝒐𝒔𝒕 = ₱𝟒𝟎, 𝟎𝟎𝟎
 Example STEP 5. Identify and compute the total fixed
costs.
Susan sells sacks of rice with free
delivery to her customers. She
buys her supply of rice from a
rice trader at ₱ 2,000.00 per sack. ₱5,000 𝑟𝑒𝑛𝑡
She sells it to her customers at a +₱2,000 𝑔𝑎𝑠𝑜𝑙𝑖𝑛𝑒
price with 20% mark-up based on
cost. Susan rents a store space ₱3,000 𝑤𝑎𝑔𝑒𝑠
(inclusive of water and light)
near the public market for ₱5,000
𝑭𝒊𝒙𝒆𝒅 𝑪𝒐𝒔𝒕 = ₱𝟏𝟎, 𝟎𝟎𝟎
a month. During a month of
operation, she also incurs
gasoline expenses of ₱2,000.00
and pays wages of ₱3,000 to her
driver. How much is profit or loss if
during the month, Susan was
able to sell 20 sacks of rice?
 Example STEP 6. Use simple income statement to
compute the profit or loss.
Susan sells sacks of rice with free
delivery to her customers. She Net Sales ₱ 48,000
buys her supply of rice from a
rice trader at ₱ 2,000.00 per sack.
She sells it to her customers at a
Less: Variable Costs 40,000
price with 20% mark-up based on
cost. Susan rents a store space
Gross Profit 8,000
(inclusive of water and light)
near the public market for ₱5,000
Less: Fixed Profit 10,000
a month. During a month of
operation, she also incurs Net Loss (₱ 2,000)
gasoline expenses of ₱2,000.00
and pays wages of ₱3,000 to her Conclusion: A net loss of ₱2,000 is
driver. How much is profit or loss if
during the month, Susan was
experienced in this period because the
able to sell 20 sacks of rice? net sales made is lesser than the costs
incurred in the business.
How to Effectively
Manage your
Profit and Loss
1. Do an initial assessment
Make a review of your past
profit and loss reports and
compare them to your current
one.
 2. Use analytical tools
Your accounting team should
have proper analytical
financial tools to structure your
profit and loss statement based
on your business operations.
3. Take note of increase in
expenses.
Analyzing expense growth can
help you evaluate your
company’s use of resources.
4. Review company sales
A detailed analysis of the
company’s sales will allow your
understand if there has been an
increase or decrease in sales of
your product or service.
EXERCISE
 Watch for Less
James buys a local brand of watch from a supplier at
₱1,000.00 each. He sells them in his store at a regular price of
₱1,500.00. In operating his watch store, he also incurred other
expenses like rent of space at ₱5,000.00 and salary of his
worker for ₱10,000.00 during the month.
Case 1 If during the month of August, James sells 25 units of
watches, what is the profit he gained or the loss he incurred in
this transaction?
Case 2 If during the month of August, in order to boost his sales,
James offers a 10 % discount for each watch and was able to
sell 90 units of watches. What is the profit he gained or loss he
incurred in this transaction?