a business purchases an item for $12.25. they want to make a gross profit margin of 45% on the item. what do…

a business purchases an item for $12.25. they want to make a gross profit margin of 45% on the item. what do they need to price the item at? selling price = $?

a business purchases an item for $12.25. they want to make a gross profit margin of 45% on the item. what do they need to price the item at? selling price = $?

Answer

Answer:

$22.27$

Explanation:

Step1: Find cost - percentage relationship

The cost of the item is $C = 12.25$. The gross - profit margin formula is $Gross\ Profit\ Margin=\frac{Selling\ Price - Cost}{Selling\ Price}$. If the gross - profit margin is $45%=0.45$, then the cost as a percentage of the selling price is $1 - 0.45 = 0.55$.

Step2: Calculate selling price

Let the selling price be $S$. We know that $C = 0.55S$. Given $C = 12.25$, we can solve for $S$ using the formula $S=\frac{C}{0.55}$. Substitute $C = 12.25$ into the formula: $S=\frac{12.25}{0.55}\approx22.27$.