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CMAT Topics

Profit, Loss

Profit, loss, commission, tax, and VAT are real-world financial concepts used in trade, salary systems, and government taxation. TU CMAT frequently tests these topics in word problems.

Practice MCQs for Profit, Loss

Fundamental Principles

Cost Price (CP)

The price at which an item is purchased.

Selling Price (SP)

The price at which an item is sold.

Profit

Profit = SP - CP (when SP > CP).

Loss

Loss = CP - SP (when CP > SP).

Commission

A percentage earned by an agent or seller for facilitating a transaction.

Taxation

Tax is a compulsory payment imposed by the government on income or goods.

VAT (Value Added Tax)

A consumption tax applied on the value added at each stage of production or distribution.

Essential Formulation Tips

  • Use 100-based method for quick percentage calculations.
  • Convert word problems into CP and SP format first.
  • VAT is always added after base price calculation.
  • Commission problems often involve total sales.
  • Profit/Loss percentage is more important than actual values in CMAT.

Shortcut Execution Techniques

  • Profit % = (SP/CP - 1) × 100
  • Loss % = (1 - SP/CP) × 100
  • If Profit = Loss, CP is harmonic mean case
  • Successive discount = a + b - ab/100
  • VAT added price = Base × (1 + VAT/100)

Contextual Inquiries (FAQs)

Q: On which value is profit percentage calculated?

A: Profit percentage is always calculated on Cost Price (CP).

Q: Is VAT included in selling price?

A: Yes, VAT is added to the base price before final selling price.

Q: What is commission based on?

A: Commission is based on total sales or transaction value.