Question

Lucy buys 7kg of nuts to sell.

She pays £10 for the nuts.
Lucy puts all the nuts into bags.
She puts 350g of nuts into each bag.
She then sells each bag of nuts for 75p.
Lucy sells all the bags of nuts.
Work out her percentage profit.

Answer 1

Lucy's percentage profit = 33.33% based on Sales Value

and 50% based on Cost.

Explanation:

a) Calculations:

7kg = 7,000g of nuts

Cost of 7,000g = £10

350g = 20 bags (7,000/350)

Sales value = £15 (20 x 75p)

Profit = Sales value minus Cost

Profit = £5 (£15 - £10)

Profit percentage based on sales = Profit/Sales x 100 = 5/15 x 100 = 33.33%

Profit percentage based on cost = Profit/Cost x 100 = 5/10 x 100 = 50%

b) Profit is the excess of sales over cost. There are two ways to express it in percentages. Profit can be expressed as a percentage of the cost (Markup). It can also be expressed as the percentage of the sales value (Margin).