If an item that had cost the retailer $7 sold at retail for $12.50,the gross margin percentage on selling price is:
A) 78.6%.
B) 56%.
C) 44%.
D) 21.4%.
E) 100%.

Question

Quizplus · Accepted Answer

To calculate the gross margin percentage on selling price, we need to find the difference between the selling price and the cost, divide that by the selling price, and then multiply by 100. 
Selling Price - Cost = Gross Margin
$12.50 - $7 = $5.50
Gross Margin / Selling Price = Gross Margin Percentage
$5.50 / $12.50 = 0.44 or 44%
Therefore, the gross margin percentage on selling price is 44%, which corresponds to choice C.

If an Item That Had Cost the Retailer $7 Sold