Gross Margin is Sales Revenue less the Cost of Goods Sold.

You can encourage Distributors to stock your products by increasing their Retail Margin %. However be careful that you maintain enough Gross Margin for your company to cover your other expenses when changing Price and Retail Margin.

In which situation below will your company make the most Gross Margin?

Multiple Choice

Retail Price $700, Retail Margin 37%, Unit Sales 20,000, Unit Cost $300

Retail Price $675, Retail Margin 36%, Unit Sales 22,000, Unit Cost $300

Retail Price $700, Retail Margin 35%, Unit Sales 20,000, Unit Cost $300

Retail Price $725, Retail Margin 35%, Unit Sales 18,000, Unit Cost $300