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Given the following data, find maintained margin in dollars and percent: (The answers are $5,000 and...

Given the following data, find maintained margin in dollars and percent: (The answers are $5,000 and 50%, I just don't know how to get there.)

Net Sales $10,000

Billed cost of goods $ 4,500

Freight $ 500

Alt/Wkrm $ 500

Cash Discounts $ 400

What is gross margin for same data? (The answers are $4,900; 49%, I just don't know how to get there.)

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Answer #1

Maintained margin: it is the difference between the products cost and its selling price.

Here selling price = $10,000

Product cost = Billed cost of goods + freight cost = $5000

Maintained margin = 10000 - (4500+500) = $5000

Hence maintained margin percent = 5000/10000 = 50%

Gross Margin: the difference between the products selling price and its cost of goods sold(whatever costs associated with bringing it upto the point of selling)

Cost of goods sold = Billed cost of goods + freight cost + alt/wkrm-cash discount = $5100 (since cash discount is decrease )

Hence gross margin = 10000 -5100 = $4900

Hence gross margin = 4900/10000 = 49%

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