VHEMBE EAST DISTRICT – VHUMBEDZI CIRCUIT
VUVUMUTSHENA SECONDARY SCHOOL
MATHEMATICAL
LITERACY GRADE 10 - 12
STUDY NOTES
COST PRICE, SELLING PRICE,
PROFIT / LOSS, BREAK-EVEN
ANALYSIS
2025
COST PRICE, SELLING PRICE, PROFIT / LOSS, BREAK-EVEN
ANALYSIS
Cost price: The price at which goods are or have been bought by a merchant or retailer. It is
the total amount of money that it costs a manufacturer to produce a given product or provide
a given service.
The cost price consist of:
• Production cost – cost in manufacturing the product e.g. labour, raw materials
• Operating costs – cost involved in the daily running of the business e.g. rent, water,
Stationary
Selling Price: The price at which goods or services are sold by the seller to the buyer. The
market value of the product.
Profit: A financial gain, especially the difference between the selling price (income) and the
cost price (expenses). Income is bigger than the expenses. Income > Expenses
Loss: When the expenses are more than the income.
Income < Expenses
Break-even point: Income = Expenses, no profit or loss is made. Where the income and
expenses graphs intercept.
Percentage calculations:
If you have a fixed total for example a Question Paper is out of a total of 150 marks. The
maximum mark you can obtain is 150 marks, thus 100% is the maximum percentage mark.
BUT for example, in financial contexts you will get percentages of more than 100%.
The cost price represents 100% because it serves as the base.
Selling price = Cost price + Profit
= 100% + 25%
= 125%
Add a given percentage profit to the cost price to determine the selling price:
If a percentage profit or mark up of 66,67% is added on the cost price, what will the selling
price be?
Selling Price = R12 + 12 × (66,67 ÷ 100)
= R20,00
OR
Selling Price = 12 × (66,67 ÷ 100 or 0,6667) = R8,00
= R12 + R8 = R20
OR
Selling Price = R12 × (100% + 66,67%)
= R12 × (166,67 ÷ 100)
= R12 × 1,6667
Reverse percentage calculation:
From selling price to cost price
If the selling price is R30 and the profit/mark up is 60%, calculate the cost price.
Selling price = R30
= Cost Price + Profit / Mark Up
= 100% + 60%
Thus R30 = 160%
Cost Price = 30 ÷ 1,60
= R18,75
COMMON MISTAKE! in terms of
reverse percentage calculations:
Cost price = 60% of R30
= R18
= R30 – R18
= R12
If you test:
12× 1,6 = R19,20 WRONG!
R18,75 × 1,6 = R30
CORRECT!
QUESTION 1
Tebogo decided to remove garden waste
on Saturdays.
She hires a bakkie and a trailer at R400 a
day. She asked her friend James to help
her. She pays James R300 per day.
Tebogo receives R20 per drum she
removes.
PHOTO 1: Hired trailer and bakkie
Use the above information and answer the questions that follow:
1.1 Calculate Tebogo's daily fixed expenses. (2)
1.2 Tebogo has removed 80 drums and her variable expenses are R240.
Calculate the variable expenses per drum. (2)
1.3 TABLE 1 below shows the ratio between the number of drums (with
waste) and the total expenses.
TABLE 1: EXPENSES OF REMOVAL OF WASTE DRUMS
Number of drums (n) 0 10 20 30 40 50 80
Expenses (C) in Rand 700 730 760 A 820 850 940
1.3.1 Write down a formula in the form Expenses (C) = .............. to
determine the expenses (C) if a number of drums (n) are removed. (2)
1.3.2 Hence determine the value of A. (2)
1.3.3 Determine the number of drums that were removed for R1 000. (2)
1.4 Tebogo receives R20 to remove 1 drum. On a certain day, she received
R1 600. Calculate the number of drums she removed on that specific day. (2)
1.5 The graph of Tebogo's expenses is drawn on the ANSWER SHEET provided. Now
draw the graph of Tebogo's income on the same set of axes and name the axes and
the graph appropriately. (6)
1.6 Use the following formula and determine the number of drums that
should be removed to break even.
Fixed expenses
Number of drums = Income per unit variable cost per unit
(3)
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