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Business math problem, whats the formula for this, how do I do this?

Business math problem, whats the formula for this, how do I do this?-example-1
User Deworde
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1 Answer

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Answer: C) 45 dollars

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Step-by-step explanation:

x = sticker price, which is some number larger than 9 (otherwise the store loses money)

x-9 = profit made per speaker

To get the gross margin percentage, we divide the profit over the sales (aka revenue). So we'll divide (x-9) over x

The expression (x-9)/x represents the gross margin in decimal form. Set this equal to 0.80 and solve for x

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(x-9)/x = 0.80

x-9 = 0.80x

x-0.80x = 9

0.20x = 9

x = 9/0.20

x = 45

The sticker price is $45

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If the sticker price is $45 per speaker, then the store owner gets 45-9 = 36 dollars in profit per speaker sold. The gross margin would be (profit)/(sales) = 36/45 = 0.80 = 80%

In other words, 80% of the revenue is profit (the remaining 20% is costs or expenses).

User Gabriel Tomitsuka
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