College

A store purchases coffee grinders from the manufacturer for $20 each. Calculate the sticker price for the grinders in order to achieve a 60% gross margin.

A. $40.00
B. $23.00
C. $33.33
D. $50.00

Answer :

Final answer:

The sticker price for the coffee grinders to achieve a 60% gross margin is $32.


Explanation:

In order to achieve a 60% gross margin, the store needs to set a price that is 60% higher than the cost price. The cost price of each coffee grinder is $20, so to calculate the sticker price, we need to add 60% of $20 to the cost price.

60% of $20 is $12. So, the sticker price of the coffee grinders should be $20 + $12 = $32.


Learn more about calculating sticker price for achieving a gross margin here:

https://brainly.com/question/16959984


The store would need to set the sticker price at $50 for each coffee grinder to achieve a 60% gross margin, by using the cost-plus pricing method based on the purchase price of $20.

To calculate the sticker price for the coffee grinders that should achieve a 60% gross margin, we would use the cost-plus pricing method. The cost of the coffee grinder is given as $20 each. To find the sticker price that would result in a 60% gross margin, we can set up the following equation:

Sticker Price - Cost of Goods Sold (COGS) = Gross Margin

Let's denote Sticker Price as SP and COGS as $20 (the purchase price). The gross margin as a decimal for 60% is 0.6. The equation will then be:

SP - $20 = 0.6 × SP

To solve for SP, we will rearrange the equation:

SP - 0.6 × SP = $20

(1 - 0.6) × SP = $20

0.4 × SP = $20

SP = $20 / 0.4

SP = $50

Therefore, the store would need to set the sticker price at $50 for each coffee grinder to achieve a 60% gross margin.