Goods Passing Through Successive Hands

Profit and loss cover a vast range of topics which can be asked in a competitive exam. One such topic is successive transactions. Usually, the question from this is very common and that is why you need to give special attention while learning this topic. Let us study this in detail.

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Successive Transactions

Whenever a product is passed through various person before reaching the customers. And there is different transaction and a different profit/loss margin every time. Usually, it’s the profit margin that is always added to the products. And this whole process is termed as the successive transaction.

Examples

Q. A manufacturer makes a profit of 15% by selling electronic iron for Rs. 6900. If the cost of manufacturing increases by 30% and the price paid by the retailer is increased by 20%, find the profit percentage made by the manufacturer.

A. 5.2 %           B. 6.15 %            C. 6.25 %                D. 7.4 %

Ans: Here in this question, the product is manufactured and then the manufacturer sells it to the retailer. So, in this case, there are successive transactions happening and we need to find the profit percentage of the manufacturer. The TV is sold at Rs. 6900 and the profit made is 15 %. So, the cost price of the iron is Rs. 6000.

Now, the cost of the manufacturing increases by 30%. So, the new cost price will be 6000 + 30% of 6000 = 6000 + 1800 = Rs. 7800. Similarly, earlier the selling price was Rs. 6900 and increase of 20% in selling price will be, 6900 + 20% of 6900 = Rs. 8280. So, the net profit made by the manufacturer will be 8280 – 7800 = Rs. 480. Thus, the percentage profit will be, 480 x 100/7800 = 6.15%. So, the correct answer is B.

Browse more Topics under Profit And Loss

• Cost Price
• Fixed, Variable and Semi-variable Cost
• Selling Price
• Marked Price
• List Price
• Margin
• Dishonest Dealers and Faulty Weights
• Percentage Loss
• Percentage Gain
• Discounts and Marked Price
• Equivalent Discount
• Equation-Based Questions
• True Discount
• Bankers Discount
• Profit and Loss Practice Questions

Example on more than two transactions

Q. Amit decided to buy an article and spent Rs. 110 on repairing it. After repairing he sold it to Ajay and earned a profit of 20% on it. Further, Ajay sold it to Aakash at a loss of 10%. Finally, Aakash sold it for Rs. 1188 and earned a profit of 10%. What was the that Amit paid for the article?

A. Rs. 840                B. Rs. 780              C. Rs. 860             D. Rs. 790

Ans: Although this is a question successive transaction, the best way to solve it is through the options. We can solve each and every option one by one and see which can be the best fit for the question. In the first option Rs. 840 is given. So, we will assume 840 is the amount Amit paid for the article. Thus after spending 110 on repair, the cost price will be 840 + 110 = Rs. 950.

Now, the product was sold at 20% profit to Ajay. So, the selling price will be 950 + 20% of 950 = 950 + 190 = Rs. 1140. Ajay sells this product at 10% to Aakash. So, the cost price is x – 10%x = 1140 => 90x/100 => x = 1266. This cannot be the answer as it is given that Aakash sold it for rs. 1188.

The second option is 780. After 110 spent on repair, it’s cost price will be Rs. 890. Adding 20% profit the selling price will be Rs. 1068. Now for Ajay, this is a selling price. Its cost price will be 1068/0.9 = 1186, which is the required answer. So, the correct answer is B.

Practice Questions

1. Amit owns a house worth of Rs. 10,000. He sells it to Bhavesh at a profit of 15%. After some days, Bhavesh sells it back to Amit at 15% loss. Find the profit or loss of Amit.

A. 17.2% profit            B. 17.2% loss              C. 6.5% profit               D. 6.5% loss

The correct answer is A.

2. P sells a chair to Q at 20% profit. Q sells the same chair to R for Rs. 75 thus making a profit of 25%. Initially, A sold the chair to P with 25% profit. What was the price at which P bought the chair?

A. Rs. 45               B. Rs. 50                  C. Rs. 55                    D. Rs. 60

The correct answer is B.

3. Sanjay made an item for Rs. 120 and sold it to Mahesh at 25% profit. Mahesh sold it to Sujoy who sold it for Rs. 198 and thereby making 10% profit. What was the profit percentage that Mahesh made?

A. 16.66 %              B. 25 %                  C. 20 %                     D. 15 %

The correct answer is C.