a business purchases an item for $6.50. they want to make a gross profit margin of 35% on the item. what do…

a business purchases an item for $6.50. they want to make a gross profit margin of 35% on the item. what do they need to price the item at? selling price = $?

a business purchases an item for $6.50. they want to make a gross profit margin of 35% on the item. what do they need to price the item at? selling price = $?

Answer

Explanation:

Step1: Recall profit - margin formula

Gross profit margin = $\frac{Selling\ Price - Cost\ Price}{Selling\ Price}$. Let the selling price be $x$. We know cost price = $6.50$ and gross profit margin = $0.35$. So, $0.35=\frac{x - 6.50}{x}$.

Step2: Cross - multiply

$0.35x=x - 6.50$.

Step3: Rearrange the equation

$6.50=x - 0.35x$.

Step4: Simplify

$6.50 = 0.65x$.

Step5: Solve for $x$

$x=\frac{6.50}{0.65}=10$.

Answer:

$10$