Answer to Question #261700 in Financial Math for Anthonette

Question

7. Amlong developedan agricultural lot into a residential lot. He originally bought the lot at P300 per square meter and sold it at P1500 per square meter. How much was the gross margin? What was the gross margin rate?

Answer 1

Gross margin(In Absolute Term) = Net sales - Cost of Goods Sold(COGS)

P1500 - P300

=P1200

Thus; Gross Margin = P1200 per square meter.

Gross margin rate = {Net sales - Cost of Goods Sold(COGS)}*{100/Net sales}

( P1200)*(100/P1500)

= 80%