But the capitalist knows that the manufactured commodities represent a greater value than the cost price. According to Marx, the surplus value amounts to L10,000 (as the variable capital of L10,000 creates surplus value at the rate of 100 per cent.); but the capitalist adds to the cost price a profit which includes the gains of the enterprise and interest on the capital outlay. If the capitalist were alone in the market, his profit might suck up the whole of the surplus value of L10,000; but he has to reckon with competition and the state of the market. The cost price, plus profit, is the production price as established by the capitalist. But according to Marx, that is, in pure theory, the production price is equal to the cost price, plus surplus value. There is thus a quantitative distinction--a difference in the amount of money--between the theoretical and practical production price, as well as a qualitative distinction between the notions of the capitalist and Marx respecting the source of profit. The capitalist believes that profit is the result of the portion of capital which he has put into the process of production, combined with his own commercial ability. On the other hand, Marx asserts that the capitalist can only extract a profit because the wage workers (the living labour power) create a surplus value in the process of production for which they receive no payment. We assumed that the surplus value amounted to 100 per cent. measured with variable capital, and that L10,000 expended on wages produced L20,000. The annual balance sheet, however, would show the percentage of profit to the total outlay. Consequently, we must spread the L10,000 surplus value over the L35,000 which have been expended. The surplus value of an undertaking spread over the total capital (c) Marx calls the rate of profit, or shortly, s/c = 10000/35000 = 28.58 per cent.