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Hello,
I’d be indepted if you explain the following “margin concept”.The cost of a job is 100’000 $
If there is a 25% margin, what is the price of the job?A margin of 25% means that the profit is 25% of the selling price.
Therefore for every $100 selling price, the profit will be $25, and therefore the cost will be $75 (which is 75% of the selling price).
If the cost is $100,000, and if this is to be 75% of the selling price, then the selling price must be 100,000 / 75% = $133,333.
(If the question simply refers to ‘margin’ then this is automatically a % of the selling price. If the question ever says ‘a margin of 25% on cost’ then in this case only, the profit would be 25% of the cost.)
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