Question

For each SKU in the following table, calculate the manufacturer’s selling price (MSP), the unit’s gross margin, and the gross margin as a percentage of MSP.

	SKU #1	SKU #2	SKU #3
MSRP	8.00	10.00	12.00
Average Discount	25%	30%	28%
Allowance %	5%	8%	10%
Unit COGs	2.15	2.43	2.56
Shipping / Tariffs	0.33	0.36	0.37
MSP
Gross Margin
Gross Margin %

Answer 1

Hi,

The Formula for MSP is MSRP*(1-Discount%).

Using above formula MSP calculation is as follows,

The Formula for Gross Margin is MSP minus Unit COGs. i.e. Gross margin takes into account only production costs and not tarrifs, taxes etc.

Using above formula the calculation for Gross Margin and Gross margin % is as follows,

Checjjk the answer and lemme know if this has helped you. Good Luck !!!!!!!!! :)