Question

To calculate the final retail price while protecting a 50% gross margin target on an item costing $30, what must the retail price be?

Accepted Answer

To calculate a retail price that achieves a specific gross margin, you must divide the item cost by the inverse of the target margin percentage. Gross margin is the percentage of the retail price that remains as profit after subtracting the cost of goods sold. In this case, your target is a 50% margin, meaning the cost represents the remaining 50% of the price (100% minus 50%). To find the retail price, divide the $30 cost by 0.50, resulting in a retail price of $60. Think of it like a pie where the retail price is the whole pie and the margin is your slice; if your slice is half the pie, the cost must be the other half, making the total price twice the cost.

To calculate the final retail price while protecting a 50% gross margin target on an item costing $30, what must the retail price be?

To calculate a retail price that achieves a specific gross margin, you must divide the item cost by the inverse of the target margin percentage. Gross margin is the percentage of the retail price that....

Community Answers

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To calculate the final retail price while protecting a 50% gross margin target on an item costing $30, what must the retail price be?

To calculate a retail price that achieves a specific gross margin, you must divide the item cost by the inverse of the target margin percentage. Gross margin is the percentage of the retail price that....

Community Answers