Contracts & ExecutionQuestion 153 of 1605
A contractor's direct job costs are $80,000 and the contract sells for $100,000. What is the gross margin percentage on this job?
a.20%
b.25%
c.80%
d.125%
Explanation
Margin is gross profit divided by the selling price. Profit is $100,000 - $80,000 = $20,000; $20,000 / $100,000 = 20% margin. (Markup, by contrast, divides profit by cost: $20,000 / $80,000 = 25%.)
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