MycroFiber is a producer of microfiber material for the auto detailing industry. Jamal, the owner of MycroFiber is highly skilled in the technical and manufacturing areas, but does not understand pricing. Jamal knows he wants to cover the cost of production when selling his material and needs revenue to cover his overhead costs and to make a profit. To be sure he meets these goals, Jamal decides to take a cost-based pricing approach. If MycroFiber's cost of production is $4 a square yard, Jamal and Jamal prices his material at $10 a square yard, what is MycroFiber's margin percentage?
A) 60%.
B) 40%.
C) 250%.
D) 150%.

Question

Quizplus · Accepted Answer

Margin percentage is calculated as (Selling Price - Cost of Production) / Selling Price. So, for MycroFiber, it's ($10 - $4) / $10 = $6 / $10 = 0.6 or 60%.

MycroFiber Is a Producer of Microfiber Material for the Auto