CIMA BA3 · Chapter 13 · Question 4 of 10
A company made a gross profit of $72,000 on revenue of $240,000. Which of the following is correct?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: D) Gross profit margin is 30% and mark-up on cost is 42.9%
Explanation
Margin = gross profit / revenue = $72,000 / $240,000 = 30%. Cost of sales = $240,000 - $72,000 = $168,000. Mark-up = gross profit / cost of sales = $72,000 / $168,000 = 42.9% (to one decimal place).
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