Planning & EstimatingQuestion 612 of 700
A job costs $16,000 and is sold for $20,000. What is the gross MARGIN percentage on the selling price?
a.25%
b.80%
c.20%
d.16%
Explanation
Gross profit = 20,000 - 16,000 = 4,000. Gross margin = profit / price = 4,000 / 20,000 = 20%. Correct answer is 20%. '25%' is the MARKUP on cost (4,000 / 16,000). '80%' is cost as a percent of price (16,000 / 20,000). '16%' is a distractor with no valid basis.
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