The big ideaProfit is sales minus costs. Count both before you call a week good.
How it works
Leo wanted to know whether his Juice Cart was really earning, or only felt busy. He kept track with three words: sales, costs and profit.
Some costs stay the same, like the 4 coins a week Mr Oak charges for the cart's spot. Others come back with every cup: a lemon, sugar and a paper cup cost 1 coin.
When the coins in and the coins out are equal, the profit is zero. That is called breaking even: no gain and no loss.
Busy is not the same as profit. That is why every coin gets counted, even the costs that never change.
Leo's profit each week. Rain made week three break even.The month together: sales take away costs is profit.
Example 1: Week one
Leo sells 4 cups at 3 coins each: 4 × 3 = 12 coins in.
Costs are 4 for lemons and cups and 4 for the spot: 4 + 4 = 8 coins out.
Profit is sales minus costs: 12 − 8 = 4 coins.
Example 2: A rainy week, breaking even
Only 2 cups sell: 2 × 3 = 6 coins in.
Costs are 2 for lemons and cups and 4 for the spot: 2 + 4 = 6 coins out.
6 − 6 = 0, so Leo breaks even, with no gain and no loss.
Example 3: The best week
In week four 7 cups sell: 7 × 3 = 21 coins in.
Costs are 7 for lemons and cups and 4 for the spot: 7 + 4 = 11 coins out.
Profit: 21 − 11 = 10 coins, the most of the four weeks.
Example 4: The whole month
Sales: 12 + 18 + 6 + 21 = 57 coins.
Costs: 8 + 10 + 6 + 11 = 35 coins.
Profit: 57 − 35 = 22 coins.
Check it the other way: 4 + 8 + 0 + 10 = 22, the same.
Words to know
sales
The coins that come in.
costs
The coins that go out.
profit
Sales minus costs.
breaking even
Coins in and coins out are equal, so there is no gain and no loss.
spot
The place at the market where the cart stands, 4 coins a week.
Watch out
Profit is not the same as sales. Take the costs away first.
The spot costs the same every week, even a rainy one.
A profit of zero is not a loss. It is breaking even.
A busy week is not always a big profit. Count both the coins in and the coins out.
Try it
In week two 18 coins came in and 10 went out. What is the profit?
Six coins came in and six coins went out. What is that called?
Is paying Mr Oak for the spot a sale or a cost?
Sales are 57 coins and costs are 35 coins. What is the profit?
Answers: 1. 8 coins · 2. Breaking even · 3. A cost · 4. 22 coins
Try at homeWith a grown-up, think of a shop you know. Talk about what it pays for every week, even when few people come.
For grown-upsThink of a shop you both know and name one cost it pays every week, busy or quiet. The Juice Cart is made up; no real shop's money is used.
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