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If I want a gross margin of 25%, what percent should I mark up my product?

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Question added by Mujtaba Hussain , Accounts officer , Miraj Entertaiments
Date Posted: 2014/04/16
Abhishek Banerjee
by Abhishek Banerjee , Work Assistant , Andaman Lakshadweep Harbour Works

To achieve a gross margin or gross profit percentage of25%, you will need to mark up your product's cost by33.333%. 

Mukkaram Siddique
by Mukkaram Siddique , Finance, Management & Stocks , Amazon Foods Saudi Arabia

Gross Margin States that in equation Sales = Cost + Profit  Sales will remain 100%

So if Gross margin is25% then the question should be:

At what percentage I should cost up my product?

 

Becuase Margin & Markup are two different concepts.

So,

100%=25% - Cost

and cost will be 75%

 

In concept of Markup:

Cost must be100%

So,

125% =100% +25%

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