3. What are the percentage markups on cost that correspond to the following percentages of markup on selling price (GPM)?

20%

37-1/2% [37.5]

50%

66^-2/3% [66.666]

The questions below relate to the following scenario:

Jersey Manufacturing uses a distribution channel that includes wholesalers to retailers to ultimate consumer. The Jerome Widget 1000 is priced to wholesale at $250.00. Jersey earns a 30% margin on each Widget 1000 unit. Jerseys wholesalers markup each unit $75.00. Retailers typically charge $700.00 to customers during peak season for a Widget 1000, but the unit can be priced by retailers as low as $650.00 off season.

Show your calculations for the following questions:

4. What is Jerseys unit contribution to profit (assuming there are no other costs to be added on to the margin)?

5. What does it cost Jersey to manufacture each unit?

6. What is Jerseys Markup on Cost percentage?

7. How much profit margin percentage (GPM%) do Jerseys wholesalers earn and what is their markup on cost percentage?

8. What is the typical GPM% for Retailers in peak season and what is the corresponding markup on cost percentage?

9. What is the GPM% for Retailers who charge the lowest stated price in off-season and what is the corresponding markup on cost percentage?