Question

If a retailer has a 25 percent gross-margin percentage, how much will be generated in gross-margin dollars for each 100 of sales?

1) 25.00
2) 75.00
3) 2.50
4) 4.50
5) 7.50

Answer 1

The gross-margin dollars generated for each $100 of sales, given a 25 percent gross-margin percentage, is $25.00. The percentage is converted to a decimal (0.25) and multiplied by the sales amount to find this value.

Step-by-step explanation:

If a retailer has a 25 percent gross-margin percentage, for each $100 of sales, the gross margin dollars generated would be $25.00. The calculation to find this is quite straightforward:

• First, take the gross margin percentage, which is 25%, and convert it to a decimal. This is done by dividing the percentage by 100, resulting in 0.25.
• Next, multiply the sales amount by this decimal: $100 × 0.25 = $25.00.

Therefore, the correct answer is 1) $25.00 in gross-margin dollars for each $100 of sales.