Donna

DonnaD

Can anyone expain sales magin calculatons in simple terms, the question I am looking at is, if the cost price is £900 and the sales margin is 40% what is the selling price, I know the answer is £1500 but haven't got a clue how to work it out???

Richard

I might not explain this very well, but if the cost price is £900, this represents 60% of the selling price (as the margin is 40%)

Therefore:

Selling price = 1,500 (100%)

Cost price = 900 (60%)

Margin = 600 (40%)


900 / 60% = £1500

DonnaD

Thanks

Thanks Richard I understand the percentage part I think but is the actual equation 900/60% and not 900 x 60% as this would equal £1500, therefore in another example if the cost price is £1000 and the margin is 60% would the selling price be £2500?

Richard

Sorry, you're right it is divide not multiply.

I've worked out your example answer to be £2500 too.

DonnaD

Thanks very much!!