Mayra works at a jewelry store on the weekends. Roman, the store manager, asked her to help him with putting price tags on some new jewelry for display. Mayra was surprised that there was not much thought to the pricing process - all they did was look on the invoice for the price they paid, double that amount, and put that figure on the price tag. Therefore, an item that they paid $125 was priced at $250. The jewelry store's margin percentage on that item when sold would be:

Question

Quizplus · Accepted Answer

The margin percentage is calculated based on the selling price. Here, the store doubles the cost price to set the selling price, so the profit is $125 on a selling price of $250. The margin percentage is profit divided by selling price, which is $125/$250 = 0.5 or 50%.

Mayra Works at a Jewelry Store on the Weekends