If selling price is 100 and cost of goods is 75, what is the gross margin percentage?

Study for the Sysco Market Associate Test. Prepare with flashcards and multiple choice questions, each question comes with hints and explanations. Get ready for your exam!

Multiple Choice

If selling price is 100 and cost of goods is 75, what is the gross margin percentage?

Explanation:
Gross margin percentage shows how much of each dollar of sales remains as gross profit. It’s (selling price − cost) ÷ selling price × 100. Here, selling price is 100 and cost is 75, so gross profit is 25. Now 25 ÷ 100 = 0.25, which is 25%. So the margin is 25%. Note that 33.3% would be the markup on cost, which is a different metric.

Gross margin percentage shows how much of each dollar of sales remains as gross profit. It’s (selling price − cost) ÷ selling price × 100. Here, selling price is 100 and cost is 75, so gross profit is 25. Now 25 ÷ 100 = 0.25, which is 25%. So the margin is 25%. Note that 33.3% would be the markup on cost, which is a different metric.

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