ECONOMICS

Detailed explanation-1: -The common pitfall of calculating sales margin is failing to factor in all of the costs that go into making and selling the item when determining the “cost of goods sold” field.

Detailed explanation-2: -To calculate manually, subtract the cost of goods sold (COGS) from the net sales (gross revenues minus returns, allowances, and discounts). Then divide this figure by net sales, to calculate the gross profit margin in a percentage.

Detailed explanation-3: -Margin is the selling price of a product minus cost of goods. Using the above example, the margin for a product sold for $200 with a cost of $110 would be $90. Which is a 45% margin (margin divided by selling price).