High School

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

Answer :

Final answer:

To achieve a 60% gross margin on coffee grinders that are purchased for $20 each, the sticker price should be set at $50.

Explanation:

To calculate the sticker price for the coffee grinders in order to achieve a 60% gross margin, you will use the formula for gross margin, which is Gross Margin = (Sales - Cost of Goods Sold) / Sales.

The store purchases the coffee grinders for $20 each and wants a 60% gross margin. Let's denote the Sales price as S. The gross margin formula will look like this: 0.60 = (S - 20) / S.

First, multiply both sides of the equation by S to get rid of the fraction: 0.60S = S - 20. Then, move all terms involving S to one side: 0.60S - S = -20. This simplifies to -0.40S = -20. Divide both sides by -0.40 to solve for S: S = -20 / -0.40 = $50.

Therefore, the sticker price for each coffee grinder to achieve a 60% gross margin should be $50.

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