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Komok [63]
3 years ago
6

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
Mathematics
1 answer:
Maru [420]3 years ago
6 0

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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