Metrics 5

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15 May 2011

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By: Fawad SyedID: 500404091 Date: Tuesday, March 08, 2011
1)A computer software retailer uses a markup rate of 40%. If the retailer
pays $25 each for computer games sold in its stores, how much do the
games sell for?
25*1.40= $35
2)A golf pro shop pays its wholesaler $40 for a certain club, and then
sells that club to golfers for $75. What is the retail markup rate?
3)A shoe store uses a 40% markup on cost. Find the cost of a pair of
shoes that sells for $63.
4)In 2009, Donna Manufacturing sold 100,000 widgets for $5 each, with
a cost of goods sold of $2. What is the companys margin? Identify a
way that Donna Manufacturing can increase its profit margin?
GP= selling profit- cost of goods sold
Now we can calculate the margin
Margin(%)= gross profit / sales *100
Decrease COGS
5)If a product costs $100 and is sold with a 25% markup at a retail store,
what would be the retailers margin on the product? What should be
the markup and selling price if the retailer desires a 25% margin? Why
might the retailer be seeking to increase their margin?
100*1.25= $125 after markup
The retail margin is $25
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