A firm’s gross profit margin is 20%. Its mark-up on cost is?
Select ONE answer:
- 16 2/3rds %
- 22%
- 25%
- 30%
Show your workings to arrive at your answer, and explain and justify your reasons:
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This multiple-choice question is suitable for Accounting KS5 classes.
The answer is 3
- Not correct
- Not correct
- Correct – Gross Profit Margin = Gross Profit as a percentage of selling price = 20%. Let the selling price = £100. Therefore, gross profit = £20. Therefore, cost = £80. The mark-up on cost = Profit as a percentage of cost price. £20 / £80 = 25%.
- Not correct
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