Gross margin as a percentage is the gross profit divided by the selling price. For example, if a product sells for $100 and its cost of goods sold is $75, the gross profit is $25 and the gross margin (gross profit as a percentage of the selling price) is 25% ($25/$100). Since you know the cost of a product and you know the gross margin percentage to be achieved, you can determine the selling price and the markup needed. Let's begin by assuming that a company's product has a cost of $75 and the company desires a 25% gross margin (or 25% of the selling price). Let's use "SP" to indicate the product's required selling price and "MU$" to represent the gross profit, and state the gross margin as 0.25SP. This means that: With a selling price of $100 and a cost of $75, the $25 markup as a percentage of the $75 cost is 33.33% ($25/$75). The gross profit of $25 ($100 - $75) also means a gross margin of 25% ($25 gross profit divided by the selling price of $100).
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How to calculate selling price using cost and profit percent? We know, Selling Price = Cost Price + Profit Selling Price = Cost Price + \(\frac{Profit Percentage}{100}\) × Cost Price Selling Price = \(\frac{100 × Cost Price + Profit Percentage × Cost Price}{100}\) Selling Price = Cost Price [\(\frac{100 + Profit Percentage}{100}\)]; [Here, cost price and profit% are known.] 1. Ryan bought a book for $100 and sold it at a profit of 10%. Find the selling price of the book. Solution: Given cost price of the book = $100 Profit% = 10% We know, Selling Price = Cost Price [\(\frac{100 + Profit Percentage}{100}\)] = 100 (\(\frac{100 + 10}{100}\)) = 100 (\(\frac{110}{100}\)) = \(\frac{100 × 110}{100}\) = $110 Therefore, the selling price of the book is $110. 2. John bought a music system for $260. For how much should he sell the music system to gain 10%? Solution: Given cost price of the music system = $260 Gain% = 10% We know, Selling Price = Cost Price [\(\frac{100 + Gain Percentage}{100}\)] = 260 (\(\frac{100 + 10}{100}\)) = 260 (\(\frac{110}{100}\)) = \(\frac{260 × 110}{100}\) = $286 Therefore, he should sell the music system for $286. 3. Robert bought a machine for $1200 and sold it at a profit of 15%. Find the selling price of the machine. Solution: Given cost price of the machine = $1200 Profit% = 15% We know, Selling Price = Cost Price [\(\frac{100 + Profit Percentage}{100}\)] = 1200 (\(\frac{100 + 15}{100}\)) = 1200 (\(\frac{115}{100}\)) = \(\frac{1200 × 115}{100}\) = $1380 Therefore, the selling price of the machine is $1380. 7th Grade Math Problems From Calculate Selling Price using Cost and Profit Percent to HOME PAGE
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What is the actual profit when profit on selling price is 25%?
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