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.
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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.
