Question

Jodie’s chicken-on-a-stick food truck sells about $500 various chicken combo platters per day with an average price of $8. On average, each chicken platter cost $5 (this includes labor, materials and miscellaneous). Jodie’s profit margin is ________.

O $312
O $2,500
O $3 per chicken platter

Answer 1

The profit margin here is $3

Step-by-step explanation:

The profit margin is calculated by

Profit Margin = Sales - Cost of Sales

And

Cost of sales includes all the labour costs, cost of the inventory that has been sold, overhead cost absorbed in the inventory, depreciation etc.

So here we have cost of sales per unit of $5 per unit and selling price of per unit is $8.

By putting values we have:

Profit Margin = $8 per unit - $5 per unit = $3 per unit