2.1 Cost price and Selling price

For a business to make money it needs to sell goods or services for more than it cost.

• The cost price is how much the item cost the business.
• The selling price is how much the business gets for the item.
• A business may offer the customer a discount on items. This means that the customer will pay less than the selling price for the item.
• The profit a company makes is determined by the difference between the selling and cost price.
  If the selling price is less than the cost price, the company will make a loss.
• For example: A clothing shop paid R123 for a trouser and sold them at R177 each. Calculate the
  percentage profit that the clothing shop made on the sale of the shirts.
  Answer: Profit = R177 – R123 = R54
  % profit = 54
  123 × 100 = 43,9%

 Watch the interactive video below and answer the questions by clicking on the purple icon that appears on the video.