Profit and loss

Curriculum linksThis PPT, and the accompanying PDF workbook, covers many aspects of Level 1 and Level 2 Functional Mathematics and adult numeracy. Please refer to the download page for this resource on skillsworkshop.org for detailed curriculum links and related resources.

March 2011. Kindly contributed by Susan Brocklehurst, City College, Norwich. Search for Susan on www.skillsworkshop.org

This PPT accompanies a separate PDF workbook . Both resources directly relate, in terms of theory, to the VRQ qualification, the Foundation Diploma and also ABC Level 1 Catering.

Gross profitGross profit = sales – cost of salesDiscuss: what does this formula mean?Complete the examples in your workbook.Swap with a partner and check each other’s work

Net profitNet profit = sales – all costsIn pairs, write down a list of all other costs that you can

think of in a hotel/restaurant operationFeedback to whole class

CostsCosts can be divided into:Cost of salesOverheadsLabour/wages

OverheadsDiscuss in pairs which costs fall under the heading of

overheads – think about bills that come through the letter box each month.

Feedback to class

Wages/labourDiscuss in pairs which costs fall under the heading of

wages/labour – think about all the costs associated with employing someone.

Feedback to class

Net profitNet profit = sales – all costsComplete the examples in your workbook.Swap with a partner and check each other’s work

% gross profitAll organisations will work to an agreed % gross profitFor example, Dunston Hall works to 74%, the George

Hotel to 72%.% gross profit = gross profit/selling price x 100%

Using % gross profit to calculate how much to charge for a dishIf a dish costs £3.20 to produce and % gross profit is 70%How much should you charge for this dish?How did you work this out?Can you show this in a formula?