Question

A retailer buys cough medicine from a wholesaler at $420 per case (100 units/case) and has a target margin of 30%. What should the retail price be?

Answer 1

If the retailer buys the box at $ 420, and each box has 100 units, each unit costs $ 4.20. Seeking to have a profit margin of 30%, the following calculation should be made:

(4.2 x 30/100) + 4.2 = 1.26 + 4.2 = $ 5.46

Then, to obtain a profit of 30% each unit should be sold at $ 5.46, or the boxes should be sold at $ 546.