Lochte Inc.has collected the following data concerning one of its products:

Question

Quizplus · Accepted Answer

The data provided shows that the cost of producing the product is $115 and the product is being sold at $145. To calculate the profit margin percentage, we can use the formula:

Profit margin percentage = (Sale price - Cost price) / Sale price x 100%

Profit margin percentage = ($145 - $115) / $145 x 100% = 20.69%

However, the above calculation only gives us the profit margin percentage based on the cost price. If we want to calculate the profit margin percentage based on the selling price, we can use the formula:

Profit margin percentage = (Sale price - Cost price) / Cost price x 100%

Profit margin percentage = ($145 - $115) / $115 x 100% = 26.09%

This calculation gives us a higher profit margin percentage, indicating that the product is more profitable. Therefore, the best choice(s) is D. $145 - $115 ÷ $115 = 26.09%