Donna

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DonnaD
DonnaD Registered Posts: 6 New contributor 🐸
in AAT Level 3 (Level 6 in Scotland)
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???

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  • Richard
    Richard Registered Posts: 373 Dedicated contributor 🦉
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    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
    DonnaD Registered Posts: 6 New contributor 🐸
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    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
    Richard Registered Posts: 373 Dedicated contributor 🦉
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    Sorry, you're right it is divide not multiply.

    I've worked out your example answer to be £2500 too.
  • DonnaD
    DonnaD Registered Posts: 6 New contributor 🐸
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    Thanks very much!!

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