What do we do to quote the right Gross Margin?

Select the THREE correct answers.

Why is it so important that we keep the Gross Profit at a healthy level?

Select the TWO correct answers.

OK, let’s do some math! Don’t worry, we will do this step-by-step. 

We start with how to calculate Gross Profit. 

If your costs are 120 000, and the price to the customer is 202 900, what is the gross profit?

Please write only numbers. 

Great! Let’s try Gross Margin! 

If your costs are 120 000, and the price to the customer is 202 900, what is the gross margin in %?

(Hint: Gross Margin% = Gross Profit / Price)

Please write only numbers, and round off to the nearest number. 

Now time to calculate for a wished Gross Margin! 

The formula for setting a price with a wished gross margin is: 

Price = Cost / (1-Wished Gross Margin%)

As mentioned, we don’t start with the price, we start with the costs (or COGS). 

So, if you have a cost of 23, and you want a 41% gross margin, what is the price? 

Please only answer with numbers, and round off to the nearest number. 

Let’s try with one more! 

Remember, the formula for setting a price with a wished gross margin is: 

Price = Cost / (1-Wished Gross Margin%)

If you have a cost of 120 000, and you want a 39% gross margin, what is the price? 

Please only answer with numbers, and round off to the nearest number.