I don't quite get why the sale planning is done and then it's still using the former revenues figure. Many thanks for the answer.
Why are gross profit margins calculated using last year's revenues (590 EUR) and not 501.5 EUR?
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Even if you use the 501.5 EUR number, the answer remains the same. In this case, the % share of sales would need to be updated now considering <5 EUR category doesnt exist anymore.
For example, for category 6-10 EUR, initially it contributed 20% of sales, but now it contributes 23.52% of sales (after removing <5 EUR category). If you multiply 501.5 EUR * 23.52%, you get 118 EUR for 6-10 EUR category. Gross margin for the category doesnt change, as it none of the factors impacting gross margin changed. So assuming the same gross margin of 15% for 6-10EUR category, we get 15%*118 EUR = 17.7 EUR.
I hope this helps. Please do let me know if any further questions.
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Thank you for your answer, Pankaj