Phoenix Electronics uses a distribution channel that includes wholesalers to retailers to final consumers. The Phoenix Smart Watch is priced to wholesale at $180.00. Phoenix earns a 25% margin on each Smart Watch unit. Phoenix's wholesalers markup each unit for $60.00. Retailers typically charge $450.00 to customers during holiday season for a Smart Watch, but the unit can be priced by retailers as low as $400.00 during regular season. How much profit margin percentage (GPM %) do Phoenix's wholesalers earn and what is their markup on cost percentage? Show your complete solution.

Financial Reporting, Financial Statement Analysis and Valuation
8th Edition
ISBN:9781285190907
Author:James M. Wahlen, Stephen P. Baginski, Mark Bradshaw
Publisher:James M. Wahlen, Stephen P. Baginski, Mark Bradshaw
Chapter9: Operating Activities
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Phoenix Electronics uses a distribution channel that includes wholesalers to
retailers to final consumers. The Phoenix Smart Watch is priced to wholesale
at $180.00. Phoenix earns a 25% margin on each Smart Watch unit.
Phoenix's wholesalers markup each unit for $60.00. Retailers typically
charge $450.00 to customers during holiday season for a Smart Watch, but
the unit can be priced by retailers as low as $400.00 during regular season.
How much profit margin percentage (GPM %) do Phoenix's wholesalers
earn and what is their markup on cost percentage? Show your complete
solution.
Transcribed Image Text:Phoenix Electronics uses a distribution channel that includes wholesalers to retailers to final consumers. The Phoenix Smart Watch is priced to wholesale at $180.00. Phoenix earns a 25% margin on each Smart Watch unit. Phoenix's wholesalers markup each unit for $60.00. Retailers typically charge $450.00 to customers during holiday season for a Smart Watch, but the unit can be priced by retailers as low as $400.00 during regular season. How much profit margin percentage (GPM %) do Phoenix's wholesalers earn and what is their markup on cost percentage? Show your complete solution.
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