Introduction

This article dives into a common business scenario that many vendors encounter: purchasing apples at a cost and reselling them to achieve a desired profit margin. We'll apply basic mathematical calculations to determine the necessary price at which the remaining apples should be sold to achieve a specific profit percentage. This method can be applied to any vendor, making it an essential skill for business owners and investors.

Scenario Details

A vendor bought 120 apples for 60 units (let’s assume this is in currency). He managed to sell 80 apples at a loss of 20%. He now wants to determine the selling price per apple for the remaining apples to ensure an overall profit of 25%.

Calculation Steps

Step 1: Determine the Cost Price of Each Apple

First, we calculate the cost price of one apple:

Cost price of one apple 60/120 0.50 (or Rs. 0.50)

Step 2: Calculate the Selling Price of the 80 Apples

The vendor sold the 80 apples at 80% of their value:

Selling price of 80 apples 80 x 0.50 x 0.80 Rs. 32

Therefore, the loss incurred on the 80 apples sold is:

Loss 32 - 40 -8 (indicating a loss of Rs. 8)

With 40 apples remaining, the vendor needs to determine the selling price to achieve an overall profit of 25% on the initial investment of 60.

Step 3: Determine the Required Total Selling Price for Overall Profit

The vendor aims for a 25% profit on the initial cost:

Required total selling price 60 x 1.25 Rs. 75

This means the vendor needs to make Rs. 75 from the sale of the remaining 40 apples.

Step 4: Calculate the Selling Price Per Apple for the Remaining Apples

The selling price per apple for the remaining 40 apples should be:

Selling price per apple 75/40 Rs. 1.875

Thus, to realize an overall profit of 25%, the vendor needs to sell each of the remaining 40 apples at Rs. 1.875.

Conclusion

Understanding the relationship between cost price, selling price, and profit margin is crucial for any vendor. By applying these calculations, the vendor can optimize their sales strategy and achieve the desired profit margins. This straightforward method can be applied to various scenarios, ensuring that vendors can make informed decisions and maximize their profits.

Keywords

- vendor apples

- profit margin calculation

- cost price calculation