Summary
- Application: Bakery Pastry Sweetness
- Application: Technological Innovations GmbH
- Application: EcoFashion Textile Manufacture
- Application: EnVogue Electronics
- Application: The House of Gardening
- Application: Express Kitchen
- Application: Jewelery Elegance of Jewels
- Application: Modern Furniture SA
- Application: Educational Technology SARL
Application: Bakery Pastry Sweetness
States :
Boulangerie Pâtissière Douceur wants to adjust its pricing strategies to maximize profits. Currently, it sells an apple pie at a sales price excluding tax (STP) of €8 and purchases it at a purchase price excluding tax (PPT) of €5. They plan to produce 1000 pies this year. Managers would like to better understand the cost and margin structure to make informed decisions.
Work to do :
- Calculate the current margin rate on the sale of the apple pie.
- Determine the markup rate applied to the apple pie.
- If the sales price including VAT at 5,5% is applied, what would the price including VAT be?
- Estimate the overall margin made if all the pies are sold.
- Consider a 10% discount on the PV HT. What would be the new margin rate?
Proposed correction:
-
The margin rate = ((PV HT – PA HT) ÷ PA HT) x 100.
Substituting, ((8 – 5) ÷ 5) x 100 = 60%.
The current margin rate is 60%. -
The mark rate = ((PV HT – PA HT) ÷ PV HT) x 100.
Substituting, ((8 – 5) ÷ 8) x 100 = 37,5%.
The applied markup rate is 37,5%. -
The price including tax = PV excluding tax x (1 + VAT rate).
Replacing, 8 x (1 + 0,055) = €8,44.
The price including tax would be €8,44.
-
Overall margin = Unit margin x quantity sold.
Substituting, (8 – 5) x 1000 = €3000.
The overall margin achieved would be €3000. -
New PV HT = initial PV HT x (1 – reduction).
Substituting, 8 x (1 – 0,10) = €7,2.
New margin rate = ((7,2 – 5) ÷ 5) x 100 = 44%.
After a 10% reduction in the PV excluding tax, the new margin rate would be 44%.
Formulas Used:
| Title | Formulas |
|---|---|
| Margin rate | ((PV HT – PA HT) ÷ PA HT) x 100 |
| Brand taxes | ((PV HT – PA HT) ÷ PV HT) x 100 |
| All taxes included price | PV excluding VAT x (1 + VAT rate) |
| Overall margin | Unit margin x quantity sold |
| New PV HT | Initial PV HT x (1 – reduction) |
Application: Technological Innovations GmbH
States :
Technological Innovations GmbH is launching a new range of gadgets. The purchase price of a gadget is €30 excluding VAT, and it is sold at €50 excluding VAT. The company plans to sell 2000 units this year. The sales team wants to determine the impact of sales on financial performance.
Work to do :
- Calculate the margin rate for the gadget.
- Calculate the markup rate for the gadget.
- Calculate the sales price including VAT if the applicable VAT is 20%.
- What would be the overall margin if all units are sold at the expected price?
- If the cost of production increases by €5 per unit, what would be the new margin rate?
Proposed correction:
-
The margin rate = ((PV HT – PA HT) ÷ PA HT) x 100.
Substituting, ((50 – 30) ÷ 30) x 100 = 66,67%.
The margin rate for the gadget is 66,67%. -
The mark rate = ((PV HT – PA HT) ÷ PV HT) x 100.
Substituting, ((50 – 30) ÷ 50) x 100 = 40%.
The markup rate for the gadget is 40%. -
The price including tax = PV excluding tax x (1 + VAT rate).
Replacing, 50 x (1 + 0,20) = €60.
The sales price including tax would be €60.
-
Overall margin = Unit margin x quantity sold.
Substituting, (50 – 30) x 2000 = €40000.
The overall margin would be €40000. -
New HT PA = HT PA + Cost increase.
By replacing, 30 + 5 = €35.
New margin rate = ((50 – 35) ÷ 35) x 100 = 42,86%.
The new margin rate would be 42,86% after the increase.
Formulas Used:
| Title | Formulas |
|---|---|
| Margin rate | ((PV HT – PA HT) ÷ PA HT) x 100 |
| Brand taxes | ((PV HT – PA HT) ÷ PV HT) x 100 |
| All taxes included price | PV excluding VAT x (1 + VAT rate) |
| Overall margin | Unit margin x quantity sold |
| New PA HT | PA HT + Cost increase |
Application: EcoFashion Textile Manufacture
States :
The Manufacture Textile ÉcoFashion wants to launch a new line of ecological clothing. Each garment has a purchase price of €20 excluding VAT and sells for €45 excluding VAT. The company hopes to sell 1500 pieces for this collection. Analyzing the market, it wants to understand its margins to assess its profitability.
Work to do :
- Determine the margin rate for a garment.
- Calculate the markup rate on a garment.
- What would be the sales price including tax with a VAT of 5,5%?
- Calculate the overall expected margin for all forecasted sales.
- If the selling price is increased by €3, what will be the adjusted markup rate?
Proposed correction:
-
The margin rate = ((PV HT – PA HT) ÷ PA HT) x 100.
Substituting, ((45 – 20) ÷ 20) x 100 = 125%.
The margin rate for each garment is 125%. -
The mark rate = ((PV HT – PA HT) ÷ PV HT) x 100.
Substituting, ((45 – 20) ÷ 45) x 100 = 55,56%.
The markup rate on a garment is 55,56%. -
The price including tax = PV excluding tax x (1 + VAT rate).
Replacing, 45 x (1 + 0,055) = €47,48.
The sales price including tax would be €47,48.
-
Overall margin = Unit margin x quantity sold.
Substituting, (45 – 20) x 1500 = €37500.
The expected overall margin would be €37500. -
New PV HT = PV HT + Price increase.
By replacing, 45 + 3 = €48.
New markup rate = ((48 – 20) ÷ 48) x 100 = 58,33%.
With an increase of €3, the new markup rate would be 58,33%.
Formulas Used:
| Title | Formulas |
|---|---|
| Margin rate | ((PV HT – PA HT) ÷ PA HT) x 100 |
| Brand taxes | ((PV HT – PA HT) ÷ PV HT) x 100 |
| All taxes included price | PV excluding VAT x (1 + VAT rate) |
| Overall margin | Unit margin x quantity sold |
| New PV HT | PV HT + Price increase |
Application: EnVogue Electronics
States :
EnVogue Electronics is about to market a new type of Bluetooth speaker. Each unit costs €70 excluding VAT, and it is sold at €120 excluding VAT. The company expects to sell 1200 units this season. It wants to know the impact of these sales on its profits.
Work to do :
- Calculate the margin rate for the Bluetooth speaker.
- Calculate the markup rate applied.
- If the VAT rate is 20%, what is the selling price including VAT of the enclosure?
- What would be the total margin if all the planned units are sold?
- If the speaker is sold at a 10% discount, what would be the new selling price excluding VAT and the new unit margin?
Proposed correction:
-
The margin rate = ((PV HT – PA HT) ÷ PA HT) x 100.
Substituting, ((120 – 70) ÷ 70) x 100 = 71,43%.
The margin rate on the Bluetooth speaker is 71,43%. -
The mark rate = ((PV HT – PA HT) ÷ PV HT) x 100.
Substituting, ((120 – 70) ÷ 120) x 100 = 41,67%.
The applied markup rate is 41,67%. -
The price including tax = PV excluding tax x (1 + VAT rate).
Replacing, 120 x (1 + 0,20) = €144.
The selling price of the speaker including tax is €144.
-
Overall margin = Unit margin x quantity sold.
Substituting, (120 – 70) x 1200 = €60000.
The total margin would be €60000. -
Discount on PV HT = PV HT x Discount.
New PV HT = PV HT – Discount.
By replacing, Discount = 120 x 0,10 = €12 and
New PV excluding tax = 120 – 12 = 108 €.The new unit margin = New PV HT – PA HT = 108 – 70 = 38 €.
With the discount, the new selling price excluding tax would be €108 and the new unit margin would be €38.
Formulas Used:
| Title | Formulas |
|---|---|
| Margin rate | ((PV HT – PA HT) ÷ PA HT) x 100 |
| Brand taxes | ((PV HT – PA HT) ÷ PV HT) x 100 |
| All taxes included price | PV excluding VAT x (1 + VAT rate) |
| Overall margin | Unit margin x quantity sold |
| Discount on PV excluding VAT | PV HT x Discount |
| New PV HT | PV HT – Discount |
Application: The House of Gardening
States :
La Maison du Jardinage sells a gardening kit at a purchase price of €25 excluding VAT and a sale price of €55 excluding VAT. This year, the company plans to sell 1800 kits. It wants to assess the profitability of this activity.
Work to do :
- Calculate the margin rate on the gardening kit.
- Evaluate the markup rate for the kit.
- Determine the sales price including VAT if the VAT is 5,5%.
- What is the total margin if we achieve the sales targets?
- If the purchase price increases by 10%, what will be the new balance between PV HT and PA HT, and the new margin rate?
Proposed correction:
-
The margin rate = ((PV HT – PA HT) ÷ PA HT) x 100.
Substituting, ((55 – 25) ÷ 25) x 100 = 120%.
The margin rate on the gardening kit is 120%. -
The mark rate = ((PV HT – PA HT) ÷ PV HT) x 100.
Substituting, ((55 – 25) ÷ 55) x 100 = 54,55%.
The markup rate is 54,55%. -
The price including tax = PV excluding tax x (1 + VAT rate).
Replacing, 55 x (1 + 0,055) = €58,03.
The sales price including VAT is €58,03.
-
Overall margin = Unit margin x quantity sold.
Substituting, (55 – 25) x 1800 = €54000.
The total margin would be €54000. -
New HT PA = Initial HT PA x (1 + Increase).
Replacing, 25 x (1 + 0,10) = €27,50.
New margin rate = ((55 – 27,50) ÷ 27,50) x 100 = 100%.
With the increase in the purchase price, the new margin rate would be 100%.
Formulas Used:
| Title | Formulas |
|---|---|
| Margin rate | ((PV HT – PA HT) ÷ PA HT) x 100 |
| Brand taxes | ((PV HT – PA HT) ÷ PV HT) x 100 |
| All taxes included price | PV excluding VAT x (1 + VAT rate) |
| Overall margin | Unit margin x quantity sold |
| New PA HT | Initial PA HT x (1 + Increase) |
Application: Express Kitchen
States :
Cuisine Express, a kitchen equipment sales company, buys its blenders at €90 excluding VAT and sells them at €150 excluding VAT. It anticipates sales of 800 units this year. The team wants to understand the financial impact of the sales.
Work to do :
- Determine the blender's margin rate.
- Calculate the markup rate for the blender.
- What would the price be including tax with a VAT of 20%?
- Estimate the total expected margin if all units are sold.
- If the selling price must be reduced by 15% to improve sales, what is the new PV excluding VAT and the new margin rate?
Proposed correction:
-
The margin rate = ((PV HT – PA HT) ÷ PA HT) x 100.
Substituting, ((150 – 90) ÷ 90) x 100 = 66,67%.
The margin rate is 66,67%. -
The mark rate = ((PV HT – PA HT) ÷ PV HT) x 100.
Substituting, ((150 – 90) ÷ 150) x 100 = 40%.
The markup rate is 40%. -
The price including tax = PV excluding tax x (1 + VAT rate).
Replacing, 150 x (1 + 0,20) = €180.
The price including tax would be €180.
-
Overall margin = Unit margin x quantity sold.
Substituting, (150 – 90) x 800 = €48000.
The total expected margin is €48000. -
Discount applied = PV excluding VAT x reduction.
New PV HT = PV HT – Discount.
By replacing, Discount = 150 x 0,15 = €22,50 and
New PV excluding tax = 150 – 22,50 = 127,50 €.New margin rate = ((127,50 – 90) ÷ 90) x 100 = 41,67%.
The new selling price excluding tax would be €127,50 and the new margin rate 41,67%.
Formulas Used:
| Title | Formulas |
|---|---|
| Margin rate | ((PV HT – PA HT) ÷ PA HT) x 100 |
| Brand taxes | ((PV HT – PA HT) ÷ PV HT) x 100 |
| All taxes included price | PV excluding VAT x (1 + VAT rate) |
| Overall margin | Unit margin x quantity sold |
| Discount applied | PV HT x reduction |
| New PV HT | PV HT – Discount |
Application: Jewelery Elegance of Jewels
States :
Bijouterie Élégance des Joyaux is promoting a new gold watch. It is purchased at €500 excluding VAT and sold at €1000 excluding VAT. By planning to sell 100 units, the jeweler wants to determine whether this line will contribute positively to its financial results.
Work to do :
- Calculate the watch's margin rate.
- Determine the markup rate applied.
- What is the price including VAT at 5,5%?
- Calculate the potential overall margin.
- If we apply a 5% reduction on the selling price, what would be the new PV excluding tax and the adjusted unit margin?
Proposed correction:
-
The margin rate = ((PV HT – PA HT) ÷ PA HT) x 100.
Substituting, ((1000 – 500) ÷ 500) x 100 = 100%.
The margin rate is 100%. -
The mark rate = ((PV HT – PA HT) ÷ PV HT) x 100.
Substituting, ((1000 – 500) ÷ 1000) x 100 = 50%.
The markup rate is 50%. -
The price including tax = PV excluding tax x (1 + VAT rate).
Replacing, 1000 x (1 + 0,055) = €1055.
The price including tax is €1055.
-
Overall margin = Unit margin x quantity sold.
Substituting, (1000 – 500) x 100 = €50000.
The potential overall margin is €50000. -
Discount applied = PV excluding VAT x reduction.
New PV HT = PV HT – Discount.
By replacing, Discount = 1000 x 0,05 = €50 and
New PV excluding tax = 1000 – 50 = 950 €.The new unit margin = New PV HT – PA HT = 950 – 500 = 450 €.
With the reduction, the new selling price excluding tax would be €950 and the adjusted unit margin would be €450.
Formulas Used:
| Title | Formulas |
|---|---|
| Margin rate | ((PV HT – PA HT) ÷ PA HT) x 100 |
| Brand taxes | ((PV HT – PA HT) ÷ PV HT) x 100 |
| All taxes included price | PV excluding VAT x (1 + VAT rate) |
| Overall margin | Unit margin x quantity sold |
| Discount applied | PV HT x reduction |
| New PV HT | PV HT – Discount |
Application: Modern Furniture SA
States :
Mobilier Moderne SA is marketing a new solid wood table. The purchase cost per table is €150 excluding VAT, and it is sold at €300 excluding VAT. The company plans to sell 500 tables this year.
Work to do :
- What is the margin rate applied to the sale of the table?
- Calculate the markup rate for this table.
- What would the price be including VAT if the VAT is 20%?
- What overall margin will the company get if all the tables are sold?
- If the purchase price is negotiated at 10% less, what would be the adjusted purchase cost and the new margin rate?
Proposed correction:
-
The margin rate = ((PV HT – PA HT) ÷ PA HT) x 100.
Substituting, ((300 – 150) ÷ 150) x 100 = 100%.
The margin rate is 100%. -
The mark rate = ((PV HT – PA HT) ÷ PV HT) x 100.
Substituting, ((300 – 150) ÷ 300) x 100 = 50%.
The markup rate is 50%. -
The price including tax = PV excluding tax x (1 + VAT rate).
Replacing, 300 x (1 + 0,20) = €360.
The price including tax is €360.
-
Overall margin = Unit margin x quantity sold.
Substituting, (300 – 150) x 500 = €75000.
The overall margin is €75000. -
Reduction applied = PA HT x reduction percentage.
New PA HT = PA HT – Reduction.
By replacing, Reduction = 150 x 0,10 = €15 and
New PA HT = 150 – 15 = 135 €.New margin rate = ((300 – 135) ÷ 135) x 100 = 122,22%.
The new purchase cost is €135 and the new margin rate is 122,22%.
Formulas Used:
| Title | Formulas |
|---|---|
| Margin rate | ((PV HT – PA HT) ÷ PA HT) x 100 |
| Brand taxes | ((PV HT – PA HT) ÷ PV HT) x 100 |
| All taxes included price | PV excluding VAT x (1 + VAT rate) |
| Overall margin | Unit margin x quantity sold |
| Applied Discount | PA HT x reduction percentage |
| New PA HT | PA HT – Reduction |
Application: Educational Technology SARL
States :
Technologie Éducative SARL offers educational software with a production cost of €40 excluding VAT per license and a sales price of €100 excluding VAT. The company's goal is to sell 2500 licenses for this school year.
Work to do :
- Calculate the margin rate for a license.
- What is the mark rate?
- Determine the sales price including VAT with a VAT of 20%.
- What overall margin would be achieved with the sale of all the planned licenses?
- If the company decides to increase the selling price by €10, what will be the final selling price excluding VAT, and how will this affect the markup rate?
Proposed correction:
-
The margin rate = ((PV HT – PA HT) ÷ PA HT) x 100.
Substituting, ((100 – 40) ÷ 40) x 100 = 150%.
The margin rate per license is 150%. -
The mark rate = ((PV HT – PA HT) ÷ PV HT) x 100.
Substituting, ((100 – 40) ÷ 100) x 100 = 60%.
The markup rate is 60%. -
The price including tax = PV excluding tax x (1 + VAT rate).
Replacing, 100 x (1 + 0,20) = €120.
The sales price including VAT is €120.
-
Overall margin = Unit margin x quantity sold.
Substituting, (100 – 40) x 2500 = €150000.
The overall margin expected is €150000. -
New PV HT = PV HT + Price increase.
By replacing, 100 + 10 = €110.
New markup rate = ((110 – 40) ÷ 110) x 100 = 63,64%.
With the price increase of €10, the new selling price excluding tax would be €110, and the mark-up rate would increase to 63,64%.
Formulas Used:
| Title | Formulas |
|---|---|
| Margin rate | ((PV HT – PA HT) ÷ PA HT) x 100 |
| Brand taxes | ((PV HT – PA HT) ÷ PV HT) x 100 |
| All taxes included price | PV excluding VAT x (1 + VAT rate) |
| Overall margin | Unit margin x quantity sold |
| New PV HT | PV HT + Price increase |