If the unit selling price is 2.50 and the unit cost is 1.00 what action is needed to maintain the gross margin percentage when u
nit cost increase 0.25
1 answer:
The original gross margin is (2.50 / 1.00) - 1 = (2.5 - 1) = 1.5 = 150%
the cost increases 0.25, is an increase of (0.25 / 1.00) = 25%
in order to keep the same gross margin, you need to increase the sale price by 25%
2.50*1.25 = 3.125
Then the gross margin is (3.125 / 1.25) - 1 = (2.5 - 1) = 1.5 = 150% ( same as original )
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