2

URGENT: Easy Math help needed

Ok guys, it is really painfull to ask, because the question is easy, but I need help anyway:

I need the cost price of a Liter Beer:

1 Liter has the price to costumer 10€

Margin is 200 % in one distribution area and 150% in another distribution area

How do I calculate the cost for a liter Beer out of this?

(I know the answer should be 1.33 - but how do I get there?)

Ok guys, it is really painfull to ask, because the question is easy, but I need help anyway:

I need the cost price of a Liter Beer:

1 Liter has the price to costumer 10€

Margin is 200 % in one distribution area and 150% in another distribution area

How do I calculate the cost for a liter Beer out of this?

(I know the answer should be 1.33 - but how do I get there?)

2 answers

  • Upvotes
  • Date ascending
  • Date descending
Best Answer

I would work backwards. But first, let's start with simple stuff. If the cost is €1 and the margin is 200%, this means that the sale price is €3 -> cost price x (1 + margin). So working backwards it is (whole)sale price / (1 + margin).

In your case:

€10 / (1 + 200%) = €10 / 3 = €3.33 and from there...

€3.33 / (1 + 150%) = €3.33 / 2.5 = €1.33

I would work backwards. But first, let's start with simple stuff. If the cost is €1 and the margin is 200%, this means that the sale price is €3 -> cost price x (1 + margin). So working backwards it is (whole)sale price / (1 + margin).

In your case:

€10 / (1 + 200%) = €10 / 3 = €3.33 and from there...

€3.33 / (1 + 150%) = €3.33 / 2.5 = €1.33

(edited)

Thanks a lot! I think, i just saw, what I missed out: Take it as a two step approach... THANKS a lot! — Katharina on Mar 15, 2018

Book a coaching with Vlad

97% Recommendation Rate

388 Meetings

7,316 Q&A Upvotes

USD 299 / Coaching

Hi,

Not sure I understand correctly. First of all, what is "cost price"?

Secondly, Margin cannot be 200%. Simply because the margin is a % of price.

  • Most probably you are talking about the Markup. Markup = % of costs
  • If the Markup is 200%, price = 10€, then the cost is 1/3 of price and markup is 2/3 of price.
  • Thus the cost = Price / 3 = 3.33€

Best,

Hi,

Not sure I understand correctly. First of all, what is "cost price"?

Secondly, Margin cannot be 200%. Simply because the margin is a % of price.

  • Most probably you are talking about the Markup. Markup = % of costs
  • If the Markup is 200%, price = 10€, then the cost is 1/3 of price and markup is 2/3 of price.
  • Thus the cost = Price / 3 = 3.33€

Best,

(edited)

Hey Vlad, the data is 1:1 from a case coaching I just had, so this is correct - margin in this case means profit margin. Maybe I missused the wording. — Katharina on Mar 15, 2018

Related BootCamp article(s)

Why Math matters

Your math skills will be tested in each and every consulting interview. So you better brush up mental math skills to succeed.

Quiz

Typical Question Types in Written Tests

Questions among all tests can be categorized in math, GMAT-style, chart reading and brain teaser questions. Each type needs to be approached differently.

How to Read Charts and Data in Case Interviews

We explain and give tips on how to understand and analyze graphs, charts and data presented by interviewer to candidates in case interviews.

Quiz

Related case(s)

Airline Economics

Solved 14.0k times
Airline Economics We are an airline major operating out of India. We want to increase the number of passengers on all our flights. Could you please calculate the financial return of adding one more passenger per flight?
4.3 5 643
| Rating: (4.3 / 5.0)

We are an airline major operating out of India. We want to increase the number of passengers on all our flights. Could you please calculate the financial return of adding one more passenger per flight? Open whole case

REA Reinsurance

Solved 10.8k times
REA Reinsurance Your client, REA, is a reinsurance company. REA recently acquired another reinsurance company (approximatively same size): the choice of this company was notably based on its product portfolio as well as its market presence which appeared complement with REA. However, the acquisition is not well received by the market. The acquisition price is considered too high and the transaction has not been well graded. REA management asks you to evaluate the transaction.
4.1 5 935
| Rating: (4.1 / 5.0)

Your client, REA, is a reinsurance company. REA recently acquired another reinsurance company (approximatively same size): the choice of this company was notably based on its product portfolio as well as its market presence which appeared complement with REA. However, the acquisition is not well r ... Open whole case

MBB Final Round Case - Smart Education

Solved 2.0k times
MBB Final Round Case - Smart Education Our client is SmartBridge, a nonprofit educational institution offering face-to-face tutoring services. The client operates in the US. The mission of SmartBridge is to help as many students as possible to complete studies and prevent that they drop from the school system, in particular in disadvantaged areas. The client is considering starting operations for its services in the Chicago area. They hired us to understand if that makes sense. Due to the nonprofit regulation, SmartBridge should operate on its own in the market, without any partnership. How would you help our client?
4.7 5 70
| Rating: (4.7 / 5.0)

Our client is SmartBridge, a nonprofit educational institution offering face-to-face tutoring services. The client operates in the US. The mission of SmartBridge is to help as many students as possible to complete studies and prevent that they drop from the school system, in particular in disadvant ... Open whole case