Question
A manufacturer sells its product to a distributor who in turns sells it to a retailer.The manufacturer's selling price is $20.00 and is making a
A manufacturer sells its product to a distributor who in turns sells it to a retailer.The manufacturer's selling price is $20.00 and is making a 25% gross profit margin (GPM) on the product.The distributor marks up the product 50% on his cost, and the retailer marks up the product 100% on her cost.Respond to the following questions, showing the logic and formulas used in arriving at your conclusions.
a. What is thedollar markupfor the manufacturer?And, therefore, what is the manufacturer'smarkup on cost percentage?
b. Whatpricewill the distributor charge?Also, what is hisunit gross profit marginin percentage(GPM%)?
c. Whatpricewill the retailer charge?What is herGPMin percentage?
Question 2 options:
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