Vandelay Industries manufactures a range of latex products. To set the price of its products, George, the CEO of Vandelay, calculates the total cost associated with the manufacturing of each product, then multiples that by 1.5 to get the sales price. Therefore, a product that cost $10 for Vandelay to manufacture would sell for $15. Vandelay's margin on the sale is:
A) $5.
B) $10.
C) $15.
D) $20.

Question

Quizplus · Accepted Answer

The margin on the sale is the difference between the sales price and the cost to manufacture. Since the product sells for $15 and costs $10 to manufacture, the margin is $15 - $10 = $5.

Vandelay Industries Manufactures a Range of Latex Products