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What is the correct mark up figure if the gross profit margin is 60%?
A 60.0%
B 37.5%
C 66.7%
D 150.0%Its D.
If good were selling for $50 then profit margin of 60% would mean profit of $30 since 50 x 60/100=30.
This would mean cost of good would be $20 since 50-30=20.
Mark-up would therefore be $30 since 50-30=20.
Percent mark-up is 30/20 x 100=150%.
There are shortcuts to getting answer but I tried to illustrate principles with example.
The formula to use would be margin/cost of goods soldx100=30/20×100=150%.I’ve got the same answer but in the exam kit the answer is different.
Thank you so much for all the help.I’ve recently attempted the FA2 exam and I’ve scored 90.
Thanks to Sir Ken and opentuition for all the help.
You are welcome.I think the only explanation is there has been an error in the exam kit which is something that unfortunately happens on occasion and can cause confusion.Congratulations on your exam score.
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