How much did Mr. Sam pay for one egg?

Understanding the cost of goods sold and profit margins is a fundamental aspect of running a successful business. This concept can be illustrated through a simple example involving Mr. Sam, who bought and sold eggs. Mr. Sam purchased 10 trays of eggs, with each tray containing 30 eggs. He then sold each egg for Rs 5.00 and made a profit of Rs 450. The question that arises from this scenario is: how much did Mr. Sam pay for one egg? To answer this, we need to delve into the concepts of cost, selling price, and profit.

Understanding the Concepts

Before we can calculate the cost price of one egg, it’s important to understand the concepts involved. The cost price is the amount Mr. Sam paid to buy the eggs. The selling price is the amount he sold each egg for, and the profit is the amount he made after subtracting the cost price from the selling price.

Calculating the Total Cost and Selling Price

First, we need to calculate the total number of eggs Mr. Sam bought. He bought 10 trays, and each tray contained 30 eggs. So, the total number of eggs is 10 trays * 30 eggs/tray = 300 eggs.

Next, we calculate the total selling price. Mr. Sam sold each egg for Rs 5.00. So, the total selling price is 300 eggs * Rs 5.00/egg = Rs 1500.

Determining the Cost Price

Now, we know that Mr. Sam made a profit of Rs 450. This means that the total cost price of the eggs is the total selling price minus the profit. So, the total cost price is Rs 1500 – Rs 450 = Rs 1050.

Calculating the Cost Price Per Egg

Finally, to find out how much Mr. Sam paid for one egg, we divide the total cost price by the total number of eggs. So, the cost price per egg is Rs 1050 / 300 eggs = Rs 3.50.

Conclusion

Therefore, Mr. Sam paid Rs 3.50 for one egg. This simple example illustrates the relationship between cost price, selling price, and profit. Understanding these concepts is crucial for anyone running a business, as it allows them to price their products appropriately to ensure profitability.