Question

The line chart given below shows the profit percentage of a company on 5 different products P1, P2, P3, P4 and P5.

The revenue of product P3 is Rs. 38100. What is expenditure of product P3?

• A. 27813
• B. 30000
• C. 30480
• D. 48387

Answer 1

Answer:

B. 30000

• Revenue (Sales Price): The total income generated by a company from its business activities. It's the amount received from selling products or services.

• Expenditure (Cost Price): The total amount spent by a company to produce or acquire goods and services. This includes manufacturing costs, operational costs, etc.

• Profit: The financial gain when the Revenue is greater than the Expenditure.Profit = Revenue - Expenditure.

• Profit Percentage: The percentage of profit earned in relation to the Expenditure. It indicates the efficiency of a business operation.

Formula for Profit Percentage

• The standard formula to calculate Profit Percentage is:

  Profit Percentage = [(Revenue - Expenditure) / Expenditure] * 100

• This can be rearranged to find Revenue or Expenditure if other values are known:

  Revenue = Expenditure * (1 + Profit Percentage / 100)

  or equivalently

  Revenue = Expenditure * [(100 + Profit Percentage) / 100]

Step-by-Step Calculation for Product P3

1. Identify Profit Percentage for P3: From the given line chart, locate product P3 and its corresponding profit percentage. For P3, the profit percentage is 27%.

2. Identify Given Revenue: The problem states that the revenue for product P3 is Rs. 38100.

3. Apply the Formula: Use the rearranged formula to find the Expenditure:

   Revenue = Expenditure × [(100 + Profit Percentage) / 100]

4. Substitute the Values:

   38100 = Expenditure × [(100 + 27) / 100]

   38100 = Expenditure × [127 / 100]

5. Solve for Expenditure: To find the Expenditure, multiply Revenue by 100 and divide by (100 + Profit Percentage):

   Expenditure = 38100 × (100 / 127)

   Expenditure = 3810000 / 127

   Expenditure = Rs. 30000