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Exobike made a gross profit of £9996 from selling 42 exercise bikes at £350 each - OCR - GCSE Business - Question 13 - 2019 - Paper 1

Question 13

Exobike made a gross profit of £9996 from selling 42 exercise bikes at £350 each. What was Exobike’s gross profit margin?

Worked Solution & Example Answer:Exobike made a gross profit of £9996 from selling 42 exercise bikes at £350 each - OCR - GCSE Business - Question 13 - 2019 - Paper 1

Step 1

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Answer

To find the total revenue from selling the bikes, we multiply the number of bikes sold by the selling price per bike. Therefore:

ext{Total Revenue} = ext{Number of Bikes} imes ext{Selling Price} = 42 imes 350 = £14700

Step 2

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Answer

The gross profit margin can be calculated using the formula:

ext{Gross Profit Margin} = rac{ ext{Gross Profit}}{ ext{Total Revenue}} imes 100

Substituting the values we have:

ext{Gross Profit Margin} = rac{9996}{14700} imes 100 \ = 67.99 ext{%} \ ≈ 68 ext{%}

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