Business FinancesQuestion 297 of 1632
A contractor wants a 20% gross margin on the SELLING price. If the job costs $48,000, what must the selling price be?
a.$57,600
b.$58,500
c.$60,000
d.$54,000
Explanation
When margin is based on selling price, Selling Price = Cost ÷ (1 − Margin) = $48,000 ÷ (1 − 0.20) = $48,000 ÷ 0.80 = $60,000. Note this differs from simply adding 20% to cost.
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Reviewed by Abraham Chen — Licensed California General Contractor (CSLB License #1101856 — verify)