Question

MycroFiber is a producer of microfiber material for the auto detailing industry. Jamal, the owner of MycroFiber is highly skilled in the technical and manufacturing areas, but does not understand pricing. Jamal knows he wants to cover the cost of production when selling his material and needs revenue to cover his overhead costs and to make a profit. To be sure he meets these goals, Jamal decides to take a cost-based pricing approach. If MycroFiber's cost of production is $4 a square yard, Jamal and Jamal prices his material at $10 a square yard, what is MycroFiber's margin percentage?

a. 40%.
b. 150%.
c. 60%.
d. 250%.

Answer 1

40%

Step-by-step explanation:

The MycroFiber's cost of production is $4 a square yard.

The Price of the material is $10 a square yard

The margin percentage is calculated as shown below:

Profit Margin = Profit/Revenue

Profit Margin = ($4/$10)* 100%

Profit Margin 40%

MycroFiber's margin percentage is 40%

The correct option will be "a. 40%."