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Please can someone help me understand this question – many thanks.
Product B expected selling price per unit $15.00
Target profit 25% on cost
Current cost $12.60 per unit
what is the cost gap?
answer 60 cents
doesnt matter its the margin mark up thing isnt it
i kept doing 15.00/100 – when it should be 15.00/125
Yes, it is because the target profit is 25% of the cost and therefore the cost must be 100/125 x $15 = $12. (and, of course, it checks because the profit is 15 – 12 = $3, and this is 25% x $12 🙂 )