The fact I've gotten this far in my professional career w/o ever having taken a business course is still a minor miracle to me. In any event, I have a question for those of you that did take these classes... I have a group of products that I sell to a customer. I've been asked to figure out what the overall margin is based on individual product volume. Some products are as much as 18% of the customer's total sales, while some (even if the individual unit price is more profitable) makes up as little as .4% of their total sales. How do I take that in to account?
Total Sales minus Cost of Goods Sold (what you paid for the inventory) equals Gross Profit Sales - COGS = GP Ex: Sales of $100 and COGS is $85. $100-85 = $15 = Gross profit For a %, divide gross profit by sales. (15/100 = .15 or 15%) You can do this for all inventory, or by product- you just have to know how many of each product you sold and what you paid for them & sold them for.
