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Could be anything, 40 is gross profit after costs of goods sold is deducted.

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11y ago

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Margin vs markup?

margin vs markup As every coin has two sides, likewise, margin and markup are two accounting terms which refers to the two ways of looking at business profit. When the profit is addressed as the percentage of sales, it is called profit margin. Conversely, when profit is addressed as a percentage of cost, it is called as markup. While markup is nothing but an amount by which the cost of the product is increased by the seller to cover the expenses and profit and arrive at its selling price. On the other hand, the margin is simply the percentage of selling price i.e. profit. It is the difference between the selling price and cost price of the product. The terms margin and markup are very commonly juxtaposed by many accounting students, however, they are not one and the same thing. Content: Markup Vs Margin Comparison Chart Definition Key Differences Conclusion


What is difference between Mark up and Margin?

Margin = (Sale Price - Cost)/Sale Price So lets say you are a distributor and buy soap for 1 Dollar and sell it for 2 Dollar your margin will be (2-1)/2 so 0.5 or 50 Percent gross margin. Your mark up will be how much you raise the price, so in the example above 100% from 1 to 2.


If your sale prize is 5.50dh ad cost is 3.25dh what is your profit margin?

If the sale price is $5.50dh and the ad cost is $3.25dh, the profit margin cannot be determined. The cost to produce whatever is being sold is still a factor in determining profit margin. Sales price less all costs equals the profit margin.


How do you calculate gross margin from cost of goods?

Cost of Goods Sold is found by using the following formula:Beginning Inventory+ Purchases= Cost of Goods Available for Sale- Ending Inventory= Cost of Goods SoldUsing the income statement:Sales- Cost of Goods Sold= Gross Profit+ Other Income- Expenses= Net Income Before Taxes- Income Tax Expense= Net Income(This formula can be manipulated to solve for the Cost of Goods Sold)


What is profit margin a measure of?

Profit margin is a measure of cost of goods combined with the cost of sales versus revenue from the goods sold. For example, if a retailer pays a wholesaler $1.00 for an item and the cost of selling the item is $.50 and the retail revenue from the sale is $2.00, then the profit margin for that item is 25% ($.50 gross profit divided by $2.00 revenue). The net profit is even less when the cost of such items as taxes, interest, and amortization are included in the cost algorithm.


Discuss the relative importance of BOTH gross profit and contribution margin?

Gross profit and the contribution margin are both important factors for a business' accounting functions. The gross profit allows the company to keep track of its revenue compared to expenses. The contribution margin allows the company to track the sale price of their products in relation to their costs to manufacture them.


What is the formula to work out sale price if you have the cost and the margin?

food cost $3.36food cost% 32accompaniment garnish cost $ 2.40Sales prise ?


Is contribution margin equals sale revenue minus all variable cost?

yes.


Gross vs net income?

Gross and NetGross refers to the total and Net refers to the part of the total that really matters.Gross vs Net IncomeIn accounting, for a P&L (profit and loss statement, Gross profit, or Gross income, or Gross operating profit is the difference between revenue and the cost of making a product or providing a service, before deducting overheads,payroll, taxation, and interest payments. Net profit is equal to the gross profit minus overheads minus interest payable plus one off items for a given time period.Gross Margin vs Net MarginGross margin is the ratio of gross profit to revenue. Net margin is the ratio of net profit to revenue.Gross is the profit from the transaction without deduction. Net is the profit from the transaction after deducting cost of goods and cost of the sale (manpower, taxes, rent, etc.)


How do you compute gross profit?

Gross profit is the difference btwn trading revenues (i.e. sales, closing stock etc.) and trading expenses (i.e. purchases. opening stock, freight, wages, etc.) + Earned Revenues (from the sale of the usual business products or services) - Cost of Goods Sold (the direct cost of the business product or services that were sold above) -------------------------- = Gross Profit (also called Gross Margin)


What would be a reasonable markup on liquor in a bar?

20 to 25% of cost of sale. 4 to 5 times wholesale cost to the bar. food is 3 times cost.


How do you calculate total gross profit?

Sale or Revenue for the period -less cost of good sold=gross profit cost of good sold is the cost incurred in generating the revenue