Based on this, what is per unit margin cost and Gross margin? MSRP: $5.29 Volume Discount: 30%...

Question:

Based on this, what is per unit margin cost and Gross margin?

MSRP: $5.29

Volume Discount: 30%

Promotion Allowance: 15%

Unit Cost: $1.18

MSP: 3.70

Gross Profit Margin:

The gross profit margin is the difference between the net selling price and the net purchase price per unit, expressed as a percentage of the net selling price. For manufacturers, the manufacturer's suggested retail price less the volume discount represents their selling price (MSP).

Answer and Explanation:


MSRP $5.29
Minus: Volume Discount (1.59)
($5.29 x 0.30)
Equals: MSP $3.70
Minus: Unit Cost (1.18)
Minus: Promotion Allowance (0.55)
($3.70 x 0.15)
Equals: Margin per unit $1.97
Gross Margin % 53%
($1.97 / $3.70)

Learn more about this topic:

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How to Calculate Gross Profit Margin: Definition & Formula

from Financial Accounting: Help and Review

Chapter 5 / Lesson 17
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