Question

Maganlal brought trousers for Rs. 400 and a shirt for Rs. 200 and sold them Rs.448 and Rs. 225 respectively. Which of these transactions was more profitable?

Answer 1

Hint: More percentage of profit means the transaction is more profitable. We have to consider in which case the percentage of profit is more. That will be the more profitable item.

Complete step-by-step answer:
For the trouser cost price = Rs. 400 and selling price = Rs. 448

We know that profit = selling price – cost price.
So amount of profit = \[\text{Rs}\text{. (}448-400)=\text{ Rs}\text{. }48\]

We know that percentage of profit = \[\dfrac{profit}{\text{cost price}}\times 100\]
So, percentage of profit for trouser = \[\dfrac{48}{\text{400}}\times 100\]=\[12%\]

Now, for the shirt cost price = Rs. 200 and selling price = Rs. 225
So, amount of profit = \[\text{Rs}\text{. (}225-200)=\text{ Rs}\text{. }25\]
So, percentage of profit for shirt = \[\dfrac{25}{\text{200}}\times 100\] = \[12.5%\]

We can clearly see that the percentage of profit for shirts is more than the trouser as 12.5% is greater than 12%. So, Maganlal earned more profit for shirts than trousers.

Therefore, according to the question the transaction for the shirt was more profitable.

Note: Though the amount of profit is more for the trouser than the shirt but percentage of profit is more important than amount of profit in a business. Therefore, we have to ignore the value of the amount of profit and concentrate on the percentage of profit here. Therefore, the shirt is the more profitable one.