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3. Compute the projected profit for the order quantities suggested by the management team under three scenarios: worst case in which sales equal 10,000 units, most likely case in which sales equal 20,000 units, and best case in which sales equal 30,000 units.
You divide the result by the total sales figure and multiply by 100 to get the percent gross profit margin. For example, if you had $100,000 in gross sales and $90,000 in overall costs, your gross profit margin would be 10 percent. An analysis of the gross profit margin starts with the costs of production. A large part of the cost of a typical product is the material that goes into making it. If you can reduce this cost, your costs of production go down and your gross profit margin goes up.