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In another 8th grade Business Math quiz (*Understanding Profit and Loss*), the basics of understanding how profit and loss works in the business world was discussed. If you have not already taken that quiz, please check it out as it can help you here with this quiz.

As a very brief overview of profit and loss, a **profit** is the gain you receive on an investment you make. This includes interest earned on a savings account. However, in the business world it is the amount made above and beyond what it cost you to buy a product (**unit cost**). For example, if you buy dolls to sell and you buy 50 dolls for $5.00 each and then you sell each doll for $12.00, when you sell a doll for $12.00 you then subtract your cost of $5.00 leaving you a profit of $7.00 (also referred to as the **gross profit**).

From the gross profit you must then subtract your **overhead expenses** (or operating expenses) leaving you a **net profit**. In order for a business to survive it must have a continuous net profit and very little **net loss** (when the overhead expenses are greater than the gross profit).

Again, if you have not done the quiz on *Understanding Profit and Loss*, please check it out first and then come back and take this quiz. In this quiz you are being asked to work out the following problems to see if you can determine what the net profit or the net loss will be.

1.

245 stools were purchased for a local dance hall outlet. Each stool’s unit cost was $13.00. 168 stools were then sold for $25.99 each. What is the total gross profit on the sold stools?

$2,182.32

$2,812.32

$2,281.32

$1,822.32

2.

Leah opened up her own real estate agency. The agency’s commission for each sold property was 5%. In order to meet all of her overhead costs she calculated that for each house that sold at $150,000.00 it would take 23.2% of the commission the agency received to cover her expenses so long as she sold 6 houses each month. If Leah sold 6 houses in a month, what would be the agency’s net profit for that month?

$32,756.00

$37,500.00

$30,650.00

$34,560.00

Working the problem:

$150,000.00 per house at 5% commission

150,000 x 0.05 = $7,500.00 commission per house

7,500 x 0.232 = $1,740.00 (the 23.2% operating expenses needed per house)

$7,500.00 x 6 = $45,000.00 total commission on sale of 6 houses

$1,740.00 x 6 = $10,440.00 (operating expenses incurred each month)

$45,000.00 - $10,440.00 = $34,560.00

Net Profit is: $34,560.00 for one month selling 6 houses

Answer (d) is the correct answer

$150,000.00 per house at 5% commission

150,000 x 0.05 = $7,500.00 commission per house

7,500 x 0.232 = $1,740.00 (the 23.2% operating expenses needed per house)

$7,500.00 x 6 = $45,000.00 total commission on sale of 6 houses

$1,740.00 x 6 = $10,440.00 (operating expenses incurred each month)

$45,000.00 - $10,440.00 = $34,560.00

Net Profit is: $34,560.00 for one month selling 6 houses

Answer (d) is the correct answer

3.

A new bridge was put in to connect two cities. The cost of the bridge was $5,000,000.00. In order to pay off that amount a toll booth was placed on the bridge charging each car $1.60 to cross over. The two cities want to pay off the building cost in a year plus make a $250,000.00 profit by the end of the first year. How many cars will have to pass over the bridge in the first year to pay off the building costs and provide the cities with a $250,000.00 profit?

2,831,205 cars

3,281,250 cars

2,381,520 cars

3,128,250 cars

Working the problem:

$5,000,000.00 building cost

$250,000.00 profit

$5,000,000.00 + $250,000.00 = $5,250,000.00

$1.60 per car

5,250,000 ÷ 1.60 = 3,281,250

__Solution__: 3,281,250 cars will need to cross the bridge to earn the cities the $250,000.00 profit

Answer (b) is the correct answer

$5,000,000.00 building cost

$250,000.00 profit

$5,000,000.00 + $250,000.00 = $5,250,000.00

$1.60 per car

5,250,000 ÷ 1.60 = 3,281,250

Answer (b) is the correct answer

4.

John estimated that his overhead expenses would be equal to 28% of the sales cost for each product he sold. He sold 600 baseball cards for $9.25 each. They cost him $3.75 each. What is his net profit (or net loss)?

$1,446.00

$1,546.00

$1,646.00

$1,746.00

Working the problem:

600 baseball cards at $9.25 each

600 x 9.25 = $5,550.00

600 x 3.75 = $2,250.00

$5,550.00 - $2,250.00 = $3,300.00

Gross Profit is: $3,300.00

$5,550.00 x .28 = $1,554.00 (equals the 28%)

$3,300.00 - $1,554.00 = $1,746.00

Net Profit is: $1,746.00

Answer (d) is the correct answer

600 baseball cards at $9.25 each

600 x 9.25 = $5,550.00

600 x 3.75 = $2,250.00

$5,550.00 - $2,250.00 = $3,300.00

Gross Profit is: $3,300.00

$5,550.00 x .28 = $1,554.00 (equals the 28%)

$3,300.00 - $1,554.00 = $1,746.00

Net Profit is: $1,746.00

Answer (d) is the correct answer

5.

The operating expenses for running the local gym was equal to 37% of each gym membership. Each gym membership was $590.00 per year. The gym needs to sell at least 700 yearly memberships to cover its yearly operating expenses. What is the gym’s yearly operating expenses?

$215,810.00

$215,180.00

$152,180.00

$152,810.00

Working the problem:

$590.00 per year membership fee per person

$590.00 x 700 = $413,000.00

413,000 x 0.37 = $152,810.00 (the 37%)

Yearly Operating Expenses is: $152,810.00

Answer (d) is the correct answer

$590.00 per year membership fee per person

$590.00 x 700 = $413,000.00

413,000 x 0.37 = $152,810.00 (the 37%)

Yearly Operating Expenses is: $152,810.00

Answer (d) is the correct answer

6.

The outdoor concert hall sold 31,471 tickets for $17.00 each. Its gross profit was $346,181.00. What was the unit cost of each ticket?

$10.50

$9.00

$6.00

$8.70

Working the problem:

31,471 tickets for $17.00 each

31,471 x 17 = $535,007.00

Gross Profit is: $346,181.00

$535,007.00 - $346,181.00 = $188,826.00

188,826 ÷ 31,471 = $6.00

Unit Cost is: $6.00 (per ticket)

Answer (c) is the correct answer

31,471 tickets for $17.00 each

31,471 x 17 = $535,007.00

Gross Profit is: $346,181.00

$535,007.00 - $346,181.00 = $188,826.00

188,826 ÷ 31,471 = $6.00

Unit Cost is: $6.00 (per ticket)

Answer (c) is the correct answer

7.

The Lady’s Club bought 200 cakes from the bakery for $3.50 per cake. They sold all 200 cakes for $8.75 each. What was the Lady’s Club gross profit on their sales?

$510.00

$1,050.00

$1,500.00

$1,005.00

Working the problem:

200 cakes for $3.50 each

200 x $3.50 = $700.00

200 x $8.75 = $1,750.00

$1,750.00 - $700.00 = $1,050.00

Gross Profit is: $1,050.00

Answer (b) is the correct answer

200 cakes for $3.50 each

200 x $3.50 = $700.00

200 x $8.75 = $1,750.00

$1,750.00 - $700.00 = $1,050.00

Gross Profit is: $1,050.00

Answer (b) is the correct answer

8.

Jamie’s sub shop sold 310 sandwiches for $4.75 each. Its gross profit was $821.90. What was the unit cost of each sandwich?

$2.10

$3.20

$2.40

$3.05

Working the problem:

310 sandwiches for $4.75 each

310 x 4.75 = $1,472.50

Gross Profit is: $821.90

$1,472.50 - $821.90 = $650.60

650.60 ÷ 310 = $2.0987

Unit Cost is: $2.10 (rounded up)

Answer (a) is the correct answer

310 sandwiches for $4.75 each

310 x 4.75 = $1,472.50

Gross Profit is: $821.90

$1,472.50 - $821.90 = $650.60

650.60 ÷ 310 = $2.0987

Unit Cost is: $2.10 (rounded up)

Answer (a) is the correct answer

9.

15 pairs of ice skates were bought for $11.50 each. 7 pairs were sold for $21.00. What is the total gross profit on the sold ice skates?

$56.50

$62.50

$66.50

$68.50

Working the problem:

15 pairs of ice skates at $11.50 each

7 pairs sold at $21.00 each

7 x 21 = 147

7 x 11.50 = 80.50

$147.00 - $80.50 = $66.50

Gross Profit is: $66.50

Answer (c) is the correct answer

15 pairs of ice skates at $11.50 each

7 pairs sold at $21.00 each

7 x 21 = 147

7 x 11.50 = 80.50

$147.00 - $80.50 = $66.50

Gross Profit is: $66.50

Answer (c) is the correct answer

10.

Rosie’s Flower Shop bought 20 bundles of a dozen roses each for $9.00 per bundle. The shop then re-bundled the roses into half dozen bundles and sold the half dozen bundles for $12.00 each. What was the initial unit cost (per rose) and what was the gross profit per unit (per rose) after the re-bundling?

$0.69 initial unit cost / $1.50 gross profit after re-bundling

$0.75 initial unit cost / $1.25 gross profit after re-bundling

$0.79 initial unit cost / $1.15 gross profit after re-bundling

$0.95 initial unit cost / $1.05 gross profit after re-bundling

Working the problem:

20 bundles of a dozen roses each for $9.00 per bundle

$9.00 ÷ 12 = $0.75 (initial unit cost/per rose)

$12.00 ÷ 6 = $2.00 (cost per rose after re-bundling)

$2.00 - $0.75 = $1.25

Gross Profit per rose after re-bundling: $1.25

__Solution__: $0.75 initial unit cost and $1.25 gross profit after re-bundling

Answer (b) is the correct answer

20 bundles of a dozen roses each for $9.00 per bundle

$9.00 ÷ 12 = $0.75 (initial unit cost/per rose)

$12.00 ÷ 6 = $2.00 (cost per rose after re-bundling)

$2.00 - $0.75 = $1.25

Gross Profit per rose after re-bundling: $1.25

Answer (b) is the correct answer

245 stools at $13.00 each

168 stools sold at $25.99 each

168 x 25.99 = 4,366.32

168 x 13.00 = 2,184.00

$4,366.32 - $2,184.00 = $2,182.32

Gross Profit is: $2,182.32

Answer (a) is the correct answer