Question

An appliance store

charges $80 for
their microwaves
and it cost them
$35 to produce
them. What is the
gross margin on the
microwaves?

Answer 1

The gross margin is the difference between the selling price of a product and the cost to produce it. In this case, the selling price of the microwaves is $80, and it costs $35 to produce them.

Gross Margin = Selling Price - Cost to Produce

Gross Margin = $80 - $35

Gross Margin = $45

The gross margin on the microwaves is $45.