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To verify that a selling price of $142.85 will give us the correct gross margin, we subtract the cost of $100 from the $142.85 selling price. The result is a gross profit of $42.85 which when divided by the selling price gives us the required gross margin of30% ($42.85/$142.85 ).
as cost of sales are diffcult to estimate becasue there are other fixed or variable cost, support cost etc. it is better apply margin based element on cost of products.
