In this section:
Application: Eternal Bouquets
States :
The company "Bouquets Éternels" specializes in the creation of bouquets of dried and eternal flowers. It aims to optimize its production costs to increase its profitability. You must perform several calculations to better understand its margins and costs in order to improve the sales strategy.
Work to do :
- Calculate the margin rate if the purchase price excluding tax (PA HT) of a bouquet is €15 and the sale price excluding tax (PV HT) is €30.
- Determine the mark rate using the same values of PA HT and PV HT.
- If “Bouquets Éternels” sells 200 bouquets, what is the overall margin?
- What should the selling price excluding tax be to achieve a margin rate of 50% with an excluding tax PA of €20?
- If we offer a 10% discount on the initial selling price of €30 excluding VAT, what will the recalculated margin rate be?
Proposed correction:
-
The margin rate is calculated using the formula: Margin rate = ((PV HT – PA HT) ÷ PA HT) x 100.
Substituting the given values, ((30 – 15) ÷ 15) x 100 = 100%.
The margin on each bouquet is 100%. -
The markup rate is calculated using the formula: Markup rate = ((PV HT – PA HT) ÷ PV HT) x 100.
Substituting, ((30 – 15) ÷ 30) x 100 = 50%.
The markup rate is therefore 50%. -
The overall margin is calculated using the formula: Overall margin = Unit margin x quantity sold.
The unit margin is €30 – €15 = €15.
So, €15 x 200 = €3.
The overall margin on the 200 bouquets is €3.
-
To obtain a margin rate of 50%, we use the formula: PV HT = PA HT x (1 + Margin rate).
Substituting the values, €20 x (1 + 0,50) = €30.
The selling price excluding tax should be €30 for a margin rate of 50%. -
With a 10% reduction, the new PV excluding tax is €30 – (€30 x 0,10) = €27.
The recalculated margin rate is ((€27 – €15) ÷ €15) x 100 = 80%.
After the reduction, the margin rate is 80%.
Formulas Used:
Title | Formulas |
---|---|
Margin rate | ((PV HT – PA HT) ÷ PA HT) x 100 |
Brand taxes | ((PV HT – PA HT) ÷ PV HT) x 100 |
Overall margin | Unit margin x quantity sold |
PV HT | PA HT x (1 + Margin rate) |
Application: TechnoGadget
States :
"TechnoGadget" offers a new range of electronic accessories. To launch the marketing campaign, the company must estimate costs, margins and optimize its sales prices to maximize profits. The managers are counting on you to analyze the various sales performance indicators.
Work to do :
- Determine the technically acceptable selling price to achieve a markup rate of 30%, knowing that the cost price per accessory is €25 excluding VAT.
- Calculate the net turnover required to achieve an overall margin of €500 with a margin rate of 25%.
- If TechnoGadget runs a 10% launch promotion on an initial selling price excluding VAT of €50, what is the new selling price excluding VAT?
- Estimate the number of accessories to sell to reach a turnover excluding tax of €10, if each accessory sells for €000 excluding tax.
- Analyze the strategic impact of reducing prices by 10% on TechnoGadget's competitiveness. Make a qualitative analysis.
Proposed correction:
-
To achieve a markup rate of 30%, use the formula: PV HT = PA HT ÷ (1 – Markup rate).
Substituting, €25 ÷ (1 – 0,30) = €35,71.
The selling price excluding VAT should be around €35,71. -
The net turnover required to achieve an overall margin is calculated by the formula: Net turnover = Margin ÷ Margin rate.
€500 ÷ 0,25 = €2.
A turnover of €2 excluding VAT is required to achieve this objective. -
New price excluding VAT by applying the discount: €50 – (€50 x 0,10) = €45.
Therefore, the new selling price excluding VAT is €45.
-
Number of accessories: Net sales ÷ Net sales.
€10 ÷ €000 = €40.
It will be necessary to sell 250 units to reach this goal. -
Reducing prices by 10% can improve competitiveness by making products more attractive relative to competitors, but it could also reduce margin if sales do not compensate for the loss in value. A careful cost analysis to identify potential savings can also help absorb the price reduction.
Formulas Used:
Title | Formulas |
---|---|
PV HT | PA HT ÷ (1 – Mark rate) |
Turnover excluding tax | Margin ÷ Margin Rate |
Number of articles | Turnover excluding tax ÷ PV excluding tax |
Application: Fashionista Couture
States :
Fashionista Couture is a small business specializing in the creation of custom clothing. In view of the expansion of its product range, it wants to determine the best selling prices for its new collections and analyze the margins achieved.
Work to do :
- Calculate the unit margin achieved if the selling price excluding tax of a dress is €120 and its production cost is €80.
- How many dresses should be sold to achieve an overall margin target of €4, given that the unit margin is €000?
- If Fashionista Couture decides to apply a VAT rate of 20%, what will be the selling price including tax of a dress set at €120 excluding tax?
- Determine the margin rate achieved for a dress whose net profit is €100 and net sales are €150.
- Analyze how the choice of raw materials can influence Fashionista Couture's margins and profitability.
Proposed correction:
-
The unit margin can be determined by: Unit margin = PV HT – PA HT.
So, €120 – €80 = €40.
The unit margin achieved is €40. -
Quantity to sell = Margin target ÷ unit margin.
So, €4 ÷ €000 = 40.
Fashionista Couture needs to sell 100 dresses to reach its margin target. -
Calculation of the sales price including tax: VAT inclusive = VAT excluding tax x (1 + VAT rate).
Substituting, €120 x 1,20 = €144.
The price including VAT at 20% will be €144.
-
Margin rate = ((PV HT – PA HT) ÷ PA HT) x 100.
Substituting the values, ((€150 – €100) ÷ €100) x 100 = 50%.
So the margin rate is 50%. -
Selecting high-quality raw materials can improve brand perception, leading to higher sales prices and potentially higher margins. However, these materials can also increase production costs. A balanced strategic approach is essential to maximize profitability without compromising perceived quality.
Formulas Used:
Title | Formulas |
---|---|
Unit margin | PV HT – PA HT |
Quantity for sale | Margin target ÷ unit margin |
PV including tax | PV excluding VAT x (1 + VAT rate) |
Margin rate | ((PV HT – PA HT) ÷ PA HT) x 100 |
Application: Greentech Solutions
States :
Greentech Solutions, a company specializing in ecological solutions, seeks to optimize its prices to maximize its margins while making its products more accessible. You are responsible for analyzing the pricing positioning of products and their implications on sales.
Work to do :
- If the production cost of a product is €45 excluding VAT, determine the selling price excluding VAT to achieve a margin rate of 40%.
- Calculate the unit margin if the selling price excluding tax is set at €70 and the production cost at €55.
- How many products must be sold to reach a turnover excluding tax of €21, with a selling price excluding tax of €000 per product?
- What is the markup rate for a product whose PV excluding tax is €90 and PA excluding tax is €60?
- Analyze the potential impact of a 5% price reduction strategy on Greentech Solutions' profitability and sales volume.
Proposed correction:
-
To achieve a margin rate of 40%, use the formula: PV HT = PA HT x (1 + Margin rate).
By replacing, €45 x (1 + 0,40) = €63.
The necessary sale price is €63 excluding VAT. -
The unit margin is calculated by Unit margin = PV HT – PA HT.
So, €70 – €55 = €15.
The unit margin per product is €15. -
Number of products sold = Net sales ÷ Net sales.
So, €21 ÷ €000 = €70.
300 units must be sold to reach the desired turnover.
-
Use the markup rate formula: Markup rate = ((PV HT – PA HT) ÷ PV HT) x 100.
Replacing, ((€90 – €60) ÷ €90) x 100 = 33,33%.
The markup rate is 33,33%. -
A 5% price cut can potentially increase sales volume by making products more competitive, but it could also reduce margins if the additional volume is not sufficient to offset the reduction. A demand curve analysis is essential before undertaking this strategy.
Formulas Used:
Title | Formulas |
---|---|
PV HT | PA HT x (1 + Margin rate) |
Unit margin | PV HT – PA HT |
Number of products | Turnover excluding tax ÷ PV excluding tax |
Brand taxes | ((PV HT – PA HT) ÷ PV HT) x 100 |
Application: Smart Home Innovations
States :
Smart Home Innovations, a smart home technology startup, wants to ensure its products are competitive. It requires analyzing sales prices and margins to ensure the viability of new products in the market.
Work to do :
- If the VAT rate is 5,5%, what will be the price including VAT of a device sold for €150 excluding VAT?
- Determine the margin rate of a gadget if its manufacturing cost is €35 and it is sold for €50 excluding VAT.
- Calculate the selling price required to obtain a unit margin of €20 if the cost price is €40.
- If Smart Home Innovations wants to make €3 in overall margin by selling 000 units, what should the unit margin be?
- Analyze the implications of increasing development costs on sales prices and product launch strategy.
Proposed correction:
-
PV including tax is calculated by: PV including tax = PV excluding tax x (1 + VAT rate).
For one device, €150 x (1 + 0,055) = €158,25.
The price including tax will therefore be €158,25. -
Margin rate is calculated by the formula: ((PV HT – PA HT) ÷ PA HT) x 100.
Here, ((€50 – €35) ÷ €35) x 100 = 42,86%.
The margin rate for this gadget is 42,86%. -
The necessary selling price is calculated by: PV HT = PA HT + Unit margin.
To obtain a unit margin of €20, €40 + €20 = €60.
The necessary sale price is therefore €60.
-
The required unit margin is: Overall margin ÷ Quantity sold.
So, €3 ÷ 000 = €150.
Each unit must bring in a margin of €20. -
Increased development costs may require re-evaluation of sales prices to maintain target margins. This could influence the launch strategy, adjusting the schedule or reconsidering features to remain competitive without sacrificing profitability.
Formulas Used:
Title | Formulas |
---|---|
PV including tax | PV excluding VAT x (1 + VAT rate) |
Margin rate | ((PV HT – PA HT) ÷ PA HT) x 100 |
PV HT | PA excluding tax + Unit margin |
Unit margin | Overall margin ÷ Quantity sold |
Application: Pure Wellness
States :
Pure Wellness is a company selling wellness and natural care products. It wants to adjust its margins and prices according to the evolution of raw material costs. Your role is to advise them on the commercial calculations necessary for this optimization.
Work to do :
- The cost price of a shower gel is €7 excluding VAT. If we want a margin of 50%, how much should we sell it for excluding VAT?
- Calculate the markup rate if the shower gel is sold at €15 excluding VAT and costs €9 to produce.
- How many gels must be sold to reach a turnover excluding tax of €12, knowing that they sell for €000 excluding tax?
- What is the impact on the margin if the production cost increases by 10% but the selling price excluding tax remains at €15?
- Explore how wellness market trends influence pricing strategies and consumer perception of margins.
Proposed correction:
-
The selling price required for a 50% margin is: PV HT = PA HT x (1 + Margin rate).
So, €7 x (1 + 0,50) = €10,50.
The selling price excluding VAT must be €10,50. -
Mark rate = ((PV HT – PA HT) ÷ PV HT) x 100.
Replacing, ((€15 – €9) ÷ €15) x 100 = 40%.
The markup rate is 40%. -
Number of gels = Net sales ÷ Net sales.
€12 ÷ €000 = 15 gels.
We need to sell 800 units to reach this goal.
-
If the cost increases by 10%, the new cost is €9 x 1,10 = €9,90.
The new unit margin = €15 – €9,90 = €5,10.
Initially, the margin was €6; it therefore falls by €0,90 per unit. -
Wellness trends are increasing consumers’ focus on price transparency and authenticity. These trends are motivating companies to justify their margins through ingredient quality and traceability, thereby building trust.
Formulas Used:
Title | Formulas |
---|---|
PV HT | PA HT x (1 + Margin rate) |
Brand taxes | ((PV HT – PA HT) ÷ PV HT) x 100 |
Number of gels | Turnover excluding tax ÷ PV excluding tax |
Application: Eco-Garden Supplies
States :
Eco-Garden Supplies sells eco-friendly gardening tools. With increasing competition, the company wants to review its business calculations to maintain margins while remaining competitive.
Work to do :
- What will the VAT rate be if a tool is sold for €60 including tax and its price excluding tax is €50?
- Determine the unit margin if the purchase price excluding tax is €35 and the product is sold for €50 excluding tax.
- How many tools should be sold for a total net turnover of €25, knowing that each tool sells for €000 excluding tax?
- Calculate the margin rate for a product with a cost price of €40 and sold for €60 excluding tax.
- Provide reasons why product durability can justify an increase in sales prices.
Proposed correction:
-
VAT rate = ((PTTC – PHT) ÷ PHT) x 100.
Replacing, ((€60 – €50) ÷ €50) x 100 = 20%.
The VAT rate is therefore 20%. -
Unit margin = PV HT – PA HT.
So, €50 – €35 = €15.
The unit margin is €15. -
Number of tools = Net sales ÷ Net sales.
So, €25 ÷ €000 = 50 tools.
You need to sell 500 tools.
-
Margin rate = ((PV HT – PA HT) ÷ PA HT) x 100.
Replacing, ((€60 – €40) ÷ €40) x 100 = 50%.
The margin rate is 50%. -
Product sustainability attracts consumers willing to pay a premium price in exchange for fewer replacements and a reduced environmental footprint. This justifies the emphasis on sustainability as a selling point and price increase strategy.
Formulas Used:
Title | Formulas |
---|---|
VAT rate | ((PTTC – PHT) ÷ PHT) x 100 |
Unit margin | PV HT – PA HT |
Number of tools | Turnover excluding tax ÷ PV excluding tax |
Margin rate | ((PV HT – PA HT) ÷ PA HT) x 100 |
Application: Artisan Coffee Roasters
States :
Artisan Coffee Roasters is a craft coffee roasting company specializing in premium coffee roasting. To attract more loyal customers, it is essential to review their selling prices and understand how their costs affect profitability.
Work to do :
- If the purchase price of coffee beans excluding tax is €10, how much must they be sold for excluding tax to obtain a mark-up rate of 40%?
- Calculate the turnover excluding VAT if Artisan Coffee Roasters sells 100 kg of coffee at a unit sales price of €20 excluding VAT.
- What is the overall margin obtained if the unit margin is €8 and 200 kg of coffee are sold?
- Estimate the selling price including tax with a VAT of 5,5% if the coffee is sold for €25 excluding tax.
- Explore the impact of premium grain quality on pricing strategy and consumer perception.
Proposed correction:
-
PV HT for the mark rate = PA HT ÷ (1 – Mark rate).
So, €10 ÷ (1 – 0,40) = €16,67.
The grains must be sold at €16,67 excluding VAT. -
Net sales turnover = Number of kg x Net sales price.
100 kg x €20 = €2.
The total turnover excluding tax is €2. -
Overall margin = Unit margin x quantity sold.
€8 x 200 = €1.
The overall margin is €1.
-
PV including tax = PV excluding tax x (1 + VAT rate).
€25 x 1,055 = €26,38.
The sales price including VAT is €26,38. -
Using premium beans helps justify higher prices due to the refined taste and improved customer experience, reinforcing the perceived value. However, this requires an effective communication strategy to promote this attribute to demanding consumers.
Formulas Used:
Title | Formulas |
---|---|
PV HT | PA HT ÷ (1 – Mark rate) |
Turnover | Number of kg x PV excluding VAT |
Overall margin | Unit margin x quantity sold |
PV including tax | PV excluding VAT x (1 + VAT rate) |
App: Digital Study Hub
States :
Digital Study Hub sells online training modules and wants to understand how costs impact their selling prices and margins. With the education market changing rapidly, they need to remain attractive while maintaining profitability.
Work to do :
- If a training module costs €40 to produce, at what price excluding VAT should it be sold to obtain a margin of 60%?
- Determine the applicable VAT rate if the price excluding VAT of a module is €50 and the price including VAT is €55.
- How many modules must be sold to achieve an overall margin of €5, knowing that the unit margin per module is €000?
- Calculate the markup rate for a module sold for €80 excluding tax, with a production cost of €50.
- To analyze how customer engagement can influence the Digital Study Hub’s pricing strategy.
Proposed correction:
-
PV HT for a margin of 60%: PV HT = PA HT x (1 + Margin rate).
€40 x (1 + 0,60) = €64.
The selling price excluding VAT must be €64. -
VAT rate = ((PTTC – PHT) ÷ PHT) x 100.
Replacing, ((€55 – €50) ÷ €50) x 100 = 10%.
The VAT rate is 10%. -
Number of modules = Overall margin ÷ Unit margin.
€5 ÷ €000 = 25 modules.
You need to sell 200 modules.
-
Mark rate = ((PV HT – PA HT) ÷ PV HT) x 100.
((€80 – €50) ÷ €80) x 100 = 37,5%.
The markup rate is 37,5%. -
Strong customer engagement drives increased loyalty, helping to justify higher prices through perceived value. Focus on user experience and content quality increases customers’ willingness to invest in training.
Formulas Used:
Title | Formulas |
---|---|
PV HT | PA HT x (1 + Margin rate) |
VAT rate | ((PTTC – PHT) ÷ PHT) x 100 |
Number of modules | Overall margin ÷ Unit margin |
Brand taxes | ((PV HT – PA HT) ÷ PV HT) x 100 |