Brain Teasers & Mental Math
A retailer buys a product for $60 and sells it for $80. What is the gross margin %? The markup %? Why do they differ?
Model answer
Gross margin = 25%; markup = 33.3%.
Profit per unit = 80 − 60 = $20. Margin divides by PRICE: 20/80 = 25%. Markup divides by COST: 20/60 = 33.3%.
They differ because the base differs…
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