Cost Price 

“When a person buys a product and pays a specific cost of that product, which is known as Cost Price (CP).”

Selling Price

“When a person sells a product and gets a specific amount of that product, which is known as selling Price (SP).”


  • Profit = SP – CP
  • Loss = CP – SP
  • SP = Profit + CP
  • CP = SP – Profit
  • [latex] Percentage\, Profit = \frac{Profit*100}{CP} [/latex]


Notice that, 

SP = CP+Gain

= CP + (Gain on Re.1) * CP

= CP + (Gain%/100) * CP

  • Important Formule
  1. [latex]CP=\frac{100*SP}{100* Gain Percent}[/latex]
  2. [latex] SP=\left [1+\frac{Gain\, Percent}{100}\right ]* CP= \frac{\left ( 100+Gain \, Percent \right )*CP}{100}[/latex]
  • In case of Loss
  1. Loss = CP – SP
  2. SP = CP – Loss
  3. CP = SP+Loss
  4. Loss % = Loss on Rs. k= (Loss*k)/CP

Types of COST

  • Direct Cost or Variable Cost:- The cost of link with the directly selling to the product. In other words, this is a cost that varies with the unit of product sold. 
  • Indirect Cost:There are some types of costs that have to be incurred is respective of the number of items sold and are called fixed indirect cost.
    Example, irrespective of the number of units of a product sold, the rent of the corporate office is fixed. 
    • Fixed costs divided equally among each unit of the product sold. Thus, if n units of a product is sold, then the fixed cost to be 
            • [latex]\frac{Fixed Costs}{n}[/latex]

Break-even Points:- The break even point is defined as the volume of sale at which there is no profit or no loss.

At the case of, 

    • Profit = (Actual sale – Break even sales)*Contribution per unit
    • Loss = (Break even sales – Actual sales)*Contribution per unit

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