Summary
Application: Gourmet Delights
States :
Gourmet Délices is a company specializing in the distribution of high-end food products. The sales manager wants to optimize the sales prices of the company's various products. Currently, one of their products, matured cheeses, is purchased at a price of €8 excluding VAT per unit. The sales price is €12 excluding VAT per unit. Gourmet Délices generally purchases 500 units per month. You are responsible for analyzing and providing forecasts based on these elements.
Work to do :
- Calculate the margin rate achieved on matured cheeses.
- Determine the unit margin obtained on each cheese sold.
- Calculate the overall monthly margin for matured cheeses.
- Find the selling price excluding VAT required to obtain a markup rate of 30%.
- Analyze the impact on monthly turnover if Gourmet Délices decides to increase the selling price to €14 excluding VAT.
Proposed correction:
-
To calculate the margin rate, use the formula:
Margin rate = ((PV HT – PA HT) ÷ PA HT) x 100.
Substituting, ((12 – 8) ÷ 8) x 100 = 50%.
The margin rate achieved on matured cheeses is therefore 50%. -
The unit margin is calculated by the difference between the selling price and the purchase price:
Unit margin = PV HT – PA HT.
So, 12 – 8 = €4.
Each cheese sold generates a unit margin of €4. -
The monthly overall margin is calculated by multiplying the unit margin by the quantity sold: \
Overall margin = Unit margin x Quantity sold.
So, 4 x 500 = €2.
The overall monthly margin is €2.
-
To get a markup rate of 30%, use the formula:
PV HT = PA HT ÷ (1 – Mark rate).
Substituting, 8 ÷ (1 – 0,30) = €11,43.
The selling price excluding tax will have to be €11,43 to reach a markup rate of 30%. -
If the selling price is increased to €14 excluding VAT, calculate the new monthly turnover:
Turnover = PV HT x Quantity sold.
So, 14 x 500 = €7.
Increasing the selling price to €14 excluding VAT would result in a monthly turnover of €7.
Formulas Used:
| Title | Formulas |
|---|---|
| Margin rate | ((PV HT – PA HT) ÷ PA HT) x 100 |
| Unit margin | PV HT – PA HT |
| Overall margin | Unit margin x Quantity sold |
| PV HT for brand rate | PA HT ÷ (1 – Mark rate) |
| Turnover | PV HT x Quantity sold |
Application: Tech Solutions
States :
Tech Solutions is an innovative technology company that sells connected home devices. A model from their range is purchased at €150 excluding VAT and sold at €250 excluding VAT. The CFO wants to evaluate the effectiveness of the pricing policy for this product. They plan to sell 1 units this quarter.
Work to do :
- Calculate the margin rate for this device.
- Determine the total amount of margin made on each unit sold.
- Calculate the overall quarterly margin for this device.
- Find the selling price excluding tax that would allow a markup rate of 35% to be achieved.
- Evaluate the impact on the overall margin if Tech Solutions manages to reduce the purchase cost to €140 excluding VAT.
Proposed correction:
-
The margin rate is calculated using the formula:
Margin rate = ((PV HT – PA HT) ÷ PA HT) x 100.
Substituting, ((250 – 150) ÷ 150) x 100 = 66,67%.
So the margin rate is 66,67%. -
The margin achieved per unit is calculated by:
Unit margin = PV HT – PA HT.
So, 250 – 150 = €100.
The margin made on each unit sold is €100. -
For the quarterly overall margin, use the formula: \
Overall margin = Unit margin x Quantity sold.
So, 100 x 1 = €000.
The overall margin for the quarter is €100.
-
To get a markup rate of 35%, use the formula:
PV HT = PA HT ÷ (1 – Mark rate).
Substituting, 150 ÷ (1 – 0,35) = €230,77.
The selling price excluding VAT should be €230,77. -
If the purchase cost is reduced to €140 excluding VAT, the new margin is calculated:
New unit margin = PV HT – New PA HT.
So, 250 – 140 = €110.
Overall margin with cost reduction = 110 x 1 = €000.
Reducing the purchase cost would increase the overall margin to €110.
Formulas Used:
| Title | Formulas |
|---|---|
| Margin rate | ((PV HT – PA HT) ÷ PA HT) x 100 |
| Unit margin | PV HT – PA HT |
| Overall margin | Unit margin x Quantity sold |
| PV HT for brand rate | PA HT ÷ (1 – Mark rate) |
| New unit margin | PV HT – New PA HT |
Application: Home Decor
States :
Décor Maison, a player in the interior decoration sector, sells handmade curtains. Each curtain is purchased for €30 excluding VAT and sold for €60 excluding VAT. The company plans to sell 750 curtains this month and is considering adjustments to increase its profits.
Work to do :
- Calculate the margin rate for each curtain sold.
- Establish the unit margin made on the curtains.
- Calculate the monthly overall margin.
- If Décor Maison wants the markup rate to be 40%, what should the new selling price excluding tax be?
- Analyze the changes in the overall margin if the purchase price increases by 10%.
Proposed correction:
-
The margin rate is calculated with:
Margin rate = ((PV HT – PA HT) ÷ PA HT) x 100.
Substituting, ((60 – 30) ÷ 30) x 100 = 100%.
The margin rate for each curtain is 100%. -
The unit margin is determined by:
Unit margin = PV HT – PA HT.
So, 60 – 30 = €30.
The unit margin achieved is €30. -
The monthly overall margin is given by: \
Overall margin = Unit margin x Quantity sold.
So, 30 x 750 = €22.
The overall margin for the month is €22.
-
For a markup rate of 40%, the selling price excluding tax is calculated by:
PV HT = PA HT ÷ (1 – Mark rate).
Substituting, 30 ÷ (1 – 0,40) = €50.
The new selling price excluding VAT should be €50. -
If the purchase price increases by 10%, the new PA excluding tax becomes:
New PA HT = PA HT x (1 + 0,10) = 30 x 1,10 = €33.
With this PA excluding tax, the new unit margin is: 60 – 33 = €27.
So the new overall margin is: 27 x 750 = €20.
A 10% increase in the purchase price reduces the overall margin to €20.
Formulas Used:
| Title | Formulas |
|---|---|
| Margin rate | ((PV HT – PA HT) ÷ PA HT) x 100 |
| Unit margin | PV HT – PA HT |
| Overall margin | Unit margin x Quantity sold |
| PV HT for brand rate | PA HT ÷ (1 – Mark rate) |
| New PA HT | PA HT x (1 + 0,10) |
Application: HealthTech
States :
SantéTech develops specialized medical devices. A certain device is purchased at €1 excluding VAT and sold at €200 excluding VAT in hospitals. In order to continue investing in R&D, they want to evaluate the margins generated and possible price adjustments. Currently, 2 units are planned for quarterly sale.
Work to do :
- Calculate the margin rate for this medical device.
- What is the unit margin of the device?
- Calculate the overall quarterly margin achieved on this product.
- If SantéTech wants to achieve a 25% markup rate, what should the selling price excluding tax be?
- Discuss the impact on margin if the purchase cost could be reduced by 15%.
Proposed correction:
-
The margin rate is obtained by the formula:
Margin rate = ((PV HT – PA HT) ÷ PA HT) x 100.
Substituting, ((2 – 000) ÷ 1) x 200 = 1%.
The margin rate achieved on the device is 66,67%. -
The unit margin is calculated as follows:
Unit margin = PV HT – PA HT.
So, 2 – 000 = €1.
The unit margin is €800. -
For the quarterly overall margin, do the following: \
Overall margin = Unit margin x Quantity sold.
So, 800 x 200 = €160.
The overall quarterly margin is €160.
-
For a markup rate of 25%, the PV excluding tax is calculated as follows:
PV HT = PA HT ÷ (1 – Mark rate).
Substituting, 1 ÷ (200 – 1) = €0,25.
The adjusted sale price should be €1. -
If the purchase cost is reduced by 15%, the net PA becomes:
New PA HT = PA HT x (1 – 0,15) = 1 x 200 = €0,85.
The new unit margin is then: 2 – 000 = €1.
The new overall margin is: 980 x 200 = €196.
A 15% reduction in the purchase cost increases the overall margin to €196.
Formulas Used:
| Title | Formulas |
|---|---|
| Margin rate | ((PV HT – PA HT) ÷ PA HT) x 100 |
| Unit margin | PV HT – PA HT |
| Overall margin | Unit margin x Quantity sold |
| PV HT for brand rate | PA HT ÷ (1 – Mark rate) |
| New PA HT | PA HT x (1 – 0,15) |
Application: Sports Innovate
States :
Sports Innovate is a company that creates high-precision sports equipment. A model of gym equipment that they buy for €250 excluding VAT and sell for €400 excluding VAT generates a monthly sales volume of 300 units. The company is wondering about profitability and possible adjustments.
Work to do :
- Calculate the margin rate for this equipment.
- Determine the unit margin on each piece of equipment sold.
- Calculate the overall monthly margin for this product.
- What would be the necessary selling price excluding tax for a markup rate of 20%?
- Evaluate the impact on overall margin if the selling price drops by 10%.
Proposed correction:
-
To obtain the margin rate, use the formula:
Margin rate = ((PV HT – PA HT) ÷ PA HT) x 100.
Substituting, ((400 – 250) ÷ 250) x 100 = 60%.
The margin rate is 60%. -
The unit margin is calculated by:
Unit margin = PV HT – PA HT.
So, 400 – 250 = €150.
There is a unit margin of €150. -
The monthly overall margin is determined as follows: \
Overall margin = Unit margin x Quantity sold.
So, 150 x 300 = €45.
The overall monthly margin is €45.
-
To get a 20% markup rate, use:
PV HT = PA HT ÷ (1 – Mark rate).
Substituting, 250 ÷ (1 – 0,20) = €312,50.
The selling price excluding tax for this markup rate would be €312,50. -
If the sale price decreases by 10%, the new PV excluding tax becomes:
New PV HT = PV HT x (1 – 0,10) = 400 x 0,90 = €360.
New unit margin = 360 – 250 = €110.
New overall margin = 110 x 300 = €33.
A 10% drop in the selling price will reduce the overall margin to €33.
Formulas Used:
| Title | Formulas |
|---|---|
| Margin rate | ((PV HT – PA HT) ÷ PA HT) x 100 |
| Unit margin | PV HT – PA HT |
| Overall margin | Unit margin x Quantity sold |
| PV HT for brand rate | PA HT ÷ (1 – Mark rate) |
| New PV HT | PV HT x (1 – 0,10) |
Application: Elite Mode
States :
The Mode Élite brand offers high-end fashion accessories. A special bag is purchased for €80 excluding VAT and sold for €150 excluding VAT. They plan to sell 600 bags this semester. The goal is to review the margins for a better pricing strategy.
Work to do :
- Determine the margin rate applied to each bag.
- Calculate the unit margin that the bag provides.
- Calculate the overall half-yearly margin on this product.
- What selling price excluding tax would ensure a markup rate of 50%?
- Study the impact if the selling price is reduced by €5 per bag sold.
Proposed correction:
-
The margin rate is determined by the formula:
Margin rate = ((PV HT – PA HT) ÷ PA HT) x 100.
Substituting, ((150 – 80) ÷ 80) x 100 = 87,50%.
The margin rate on each bag is 87,50%. -
The unit margin is calculated by:
Unit margin = PV HT – PA HT.
So, 150 – 80 = €70.
The unit margin is €70. -
The half-yearly overall margin is calculated as follows: \
Overall margin = Unit margin x Quantity sold.
So, 70 x 600 = €42.
The overall margin for the half-year amounts to €42.
-
For a markup rate of 50%, calculate the PV excluding tax:
PV HT = PA HT ÷ (1 – Mark rate).
Substituting, 80 ÷ (1 – 0,50) = €160.
The selling price excluding VAT should be €160. -
If the sale price is reduced by €5, the new PV excluding tax is:
New PV excluding tax = 150 – 5 = 145 €.
New unit margin = 145 – 80 = €65.
New overall margin = 65 x 600 = €39.
A reduction of €5 per bag reduces the overall margin to €39.
Formulas Used:
| Title | Formulas |
|---|---|
| Margin rate | ((PV HT – PA HT) ÷ PA HT) x 100 |
| Unit margin | PV HT – PA HT |
| Overall margin | Unit margin x Quantity sold |
| PV HT for brand rate | PA HT ÷ (1 – Mark rate) |
| New PV HT | PV HT – Reduction amount |
Application: Bio Health
States :
Bio Health produces natural food supplements. A flagship product is purchased at €20 excluding VAT and sold at €45 excluding VAT. They plan to sell 2 units per month. The company wants to re-evaluate its margins for future adjustments.
Work to do :
- Calculate the margin rate for this dietary supplement.
- Determine the unit margin achieved.
- Calculate the overall monthly margin for this product.
- What should the selling price excluding tax be to achieve a markup rate of 55%?
- Analyze the effect on the overall monthly margin if the purchase price is reduced by €4 excluding VAT per unit.
Proposed correction:
-
The margin rate is calculated using:
Margin rate = ((PV HT – PA HT) ÷ PA HT) x 100.
Substituting, ((45 – 20) ÷ 20) x 100 = 125%.
The margin rate is therefore 125%. -
The unit margin is determined by:
Unit margin = PV HT – PA HT.
So, 45 – 20 = €25.
The unit margin achieved is €25. -
The monthly overall margin is obtained via: \
Overall margin = Unit margin x Quantity sold.
So, 25 x 2 = €000.
The overall monthly margin amounts to €50.
-
For a markup rate of 55%, the PV excluding tax is:
PV HT = PA HT ÷ (1 – Mark rate).
Substituting, 20 ÷ (1 – 0,55) = €44,44.
The selling price excluding VAT should be €44,44. -
If the purchase price is reduced by €4 excluding VAT, the new PA excluding VAT becomes:
New PA HT = 20 – 4 = 16 €.
New unit margin = 45 – 16 = €29.
New overall margin = 29 x 2 = €000.
A reduction in the purchase price of €4 increases the total margin to €58.
Formulas Used:
| Title | Formulas |
|---|---|
| Margin rate | ((PV HT – PA HT) ÷ PA HT) x 100 |
| Unit margin | PV HT – PA HT |
| Overall margin | Unit margin x Quantity sold |
| PV HT for brand rate | PA HT ÷ (1 – Mark rate) |
| New PA HT | PA HT – Purchase price reduction |
Application: Smart Education
States :
Smart Education develops digital educational tools for schools. Software is purchased for €500 excluding VAT and sold for €1 excluding VAT. The company plans to sell 000 licenses per quarter. Smart Education wants to review its margins to optimize its sales.
Work to do :
- Calculate the margin rate for this software.
- What is the unit margin generated by the sale of each license?
- Calculate the overall quarterly margin achieved.
- What should the selling price excluding tax be for a markup rate of 60%?
- Evaluate the impact on margin if the selling price increases by 20%.
Proposed correction:
-
The margin rate is obtained by:
Margin rate = ((PV HT – PA HT) ÷ PA HT) x 100.
Substituting, ((1 – 000) ÷ 500) x 500 = 100%.
The margin rate on the software is 100%. -
The unit margin is calculated by:
Unit margin = PV HT – PA HT.
So, 1 – 000 = €500.
The margin made per license is €500. -
The quarterly overall margin is calculated as follows: \
Overall margin = Unit margin x Quantity sold.
So, 500 x 150 = €75.
The overall margin for the quarter is €75.
-
For a markup rate of 60%, the necessary PV excluding tax is:
PV HT = PA HT ÷ (1 – Mark rate).
Substituting, 500 ÷ (1 – 0,60) = €1.
The selling price excluding tax must be €1. -
If the selling price increases by 20%, the new PV excluding tax becomes:
New PV excluding tax = 1 x 000 = €1,20.
New unit margin = 1 – 200 = €500.
New overall margin = 700 x 150 = €105.
A 20% increase in the selling price will raise the overall margin to €105.
Formulas Used:
| Title | Formulas |
|---|---|
| Margin rate | ((PV HT – PA HT) ÷ PA HT) x 100 |
| Unit margin | PV HT – PA HT |
| Overall margin | Unit margin x Quantity sold |
| PV HT for brand rate | PA HT ÷ (1 – Mark rate) |
| New PV HT | PV HT x (1 + 0,20) |
Application: Health Accelerator
States :
Accélérateur Santé is a company that develops fitness equipment. The purchase price of an exercise bike is €350 excluding VAT, and it is sold at €550 excluding VAT. They plan to sell 400 units during the next marketing campaign.
Work to do :
- Calculate the margin rate for the exercise bike.
- What is the unit margin generated by each sale?
- Calculate the overall margin expected for the campaign.
- What should the selling price be excluding tax to obtain a markup rate of 45%?
- What would be the effects on total turnover if the quantity sold increased by 25%?
Proposed correction:
-
The margin rate is calculated with:
Margin rate = ((PV HT – PA HT) ÷ PA HT) x 100.
Substituting, ((550 – 350) ÷ 350) x 100 = 57,14%.
The margin rate for the bicycle is 57,14%. -
The unit margin is calculated by:
Unit margin = PV HT – PA HT.
So, 550 – 350 = €200.
The margin on each sale is €200. -
The expected overall margin is determined as follows: \
Overall margin = Unit margin x Quantity sold.
So, 200 x 400 = €80.
The overall margin expected for the campaign is €80.
-
For a markup rate of 45%, the necessary PV excluding tax is:
PV HT = PA HT ÷ (1 – Mark rate).
Substituting, 350 ÷ (1 – 0,45) = €636,36.
The sale price should be €636,36. -
If sales increase by 25%, the new quantity sold will be:
New quantity = 400 x 1,25 = 500 units.
The total turnover will then be: 550 x 500 = €275.
A 25% increase in sales would bring total turnover to €275.
Formulas Used:
| Title | Formulas |
|---|---|
| Margin rate | ((PV HT – PA HT) ÷ PA HT) x 100 |
| Unit margin | PV HT – PA HT |
| Overall margin | Unit margin x Quantity sold |
| PV HT for brand rate | PA HT ÷ (1 – Mark rate) |
| New quantity | Quantity sold x (1 + Rate of increase) |