Calculations for gross margins

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Reference no: EM131777939

Kevin and Sarah’s friend Ally wants in on the entrepreneurial action and decides to sell her world famous Mega-Death Choco Cookies at fairs and church carnivals. She has learned the following calculations for gross margins:

Gross margin (as a percent) = (Selling price – costs) / Selling price

Gross profit in dollars = selling price – costs

At the county fair she had the following results:

Price for a dozen cookies = $12

Costs for ingredients = $3

Booth and table cloth = $150

Other fixed expenses = $200

In two days, she sold 214 dozen cookies (these are really good cookies)

What is Ally’s gross margin for a dozen cookies?

1) 70%

2) 68%

3) 75%

4) 50%

5) She needs more information to know

Reference no: EM131777939

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