Business FinancesQuestion 1106 of 1632
To achieve a 30% gross margin, what markup on cost must a contractor apply?
a.42.9%
b.70%
c.30%
d.23.1%
Explanation
The markup that yields a given margin = margin / (1 - margin). Here 0.30 / 0.70 = 0.4286 = 42.9%. Check with cost $100: 42.9% markup gives price $142.90; margin = $42.90 / $142.90 = 30%.
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Reviewed by Abraham Chen — Licensed California General Contractor (CSLB License #1101856 — verify)