Business FinancesQuestion 1102 of 1605
A job costs $12,000 and is sold for $15,000. What is the gross PROFIT MARGIN (as a percentage of the selling price)?
a.20%
b.12.5%
c.25%
d.15%
Explanation
Gross profit = $15,000 - $12,000 = $3,000. Margin is profit divided by SELLING price: $3,000 / $15,000 = 0.20 = 20%. (The markup, by contrast, would be $3,000 / $12,000 = 25%.)
Practice all 1605 questions free — no signup required.
Related questions on this topic
- Effective January 1, 2023, the California Contractor License Bond was increased to:
- When is a Bond of Qualifying Individual (BQI) required, separate from the standard $25,000 Contractor License Bond?
- A contractor's direct job costs are $8,000. He applies a 25% markup on cost. What is the total price he charges the customer?
- A contractor wants a 40% gross margin on a job whose direct costs are $6,000. What selling price must he set?
- A 50% markup on cost is equivalent to what gross profit margin?
- A contractor's price is $20,000 and direct cost is $16,000. What is the markup percentage on cost?
Last reviewed: · editorial process
Sen Lin, PrepPass Founder · Verified against California CSLB Contractor License Law & Business Exam · How we review
Reviewed by Abraham Chen — Licensed California General Contractor (CSLB License #1101856 — verify)