Mary buys 8 widgets for $40.00. She adds $1.00 in enhancements to each widget and sells them for $9.00 each. What is Mary's estimated gross profit margin?
25%
33%
39%
44%
50%
67$
The profit is 8x9 - (40 + 8) = 72 - 48 = $24
The total cost is $48. The profit is 24/48 = __ % of the cost.
That is the gross margin.
To calculate Mary's estimated gross profit margin, we need to determine the total cost and the total revenue.
1. First, let's calculate the cost of the widgets. Mary buys 8 widgets for $40.00. So, the cost per widget would be $40.00 / 8 = $5.00.
2. Next, let's calculate the total cost. Mary buys 8 widgets, and the cost per widget is $5.00. So, the total cost of the widgets would be 8 * $5.00 = $40.00.
3. Now, let's calculate the total revenue. Mary sells each widget for $9.00, and she sells 8 widgets. So, the total revenue would be 8 * $9.00 = $72.00.
4. Finally, let's calculate the estimated gross profit margin using the formula: ((Total Revenue - Total Cost) / Total Revenue) * 100.
Estimated gross profit margin = (($72.00 - $40.00) / $72.00) * 100 = (32 / 72) * 100 = 0.4444 * 100 = 44.44%
Thus, Mary's estimated gross profit margin is approximately 44%.
To find Mary's estimated gross profit margin, we need to calculate her total revenue and her total cost.
1. Calculate Mary's total revenue:
Mary sells each widget for $9.00, and she bought 8 widgets. Therefore, her total revenue is 8 * $9.00 = $<<8*9=72.00>>72.00
2. Calculate Mary's total cost:
Mary bought 8 widgets for $40.00, and she added $1.00 in enhancements to each widget. So, her total cost is $40.00 + $1.00 * 8 = $40.00 + $8.00 = $<<40+8=48.00>>48.00
3. Calculate Mary's gross profit:
Mary's gross profit is the difference between her total revenue and her total cost. So, her gross profit is $72.00 - $48.00 = $<<72-48=24.00>>24.00
4. Calculate Mary's gross profit margin:
To calculate the gross profit margin, divide the gross profit by the total revenue and then multiply by 100 to convert it into a percentage.
Gross profit margin = (gross profit / total revenue) * 100
Gross profit margin = ($24.00 / $72.00) * 100 = 33.33...%
Therefore, Mary's estimated gross profit margin is approximately 33%.
None of the provided answer choices is exactly 33%.