A company sells a product for $120, which includes a 20% profit margin. Calculate the cost price of the product.

Sun, 03 May 2026 19:50:15 +0000

**Why $120 with a 20% Profit Margin? Unlocking the Cost Behind the Price** In a market where consumers increasingly analyze value before purchasing, the blend of a premium list price and a clear 20% profit margin sparks curiosity—especially when that price hits $120. What happens behind the scenes to calculate this cost? While no personal data is shared, understanding the pricing structure reveals valuable insights into transparency, consumer expectations, and supply chain realities. This insight not only satisfies financial curiosity but also builds trust in a complex retail environment. ### Why A company prices a product at $120 with a 20% profit margin In the evolving U.S. market, dynamic pricing strategies reflect both competitive positioning and transparent accounting. A selling price of $120, with a 20% margin, means the cost price must account for this margin inclusion. This format —inflating the list to absorb profit—enhances perceived fairness, letting buyers see where value lies. Consumers today prefer clarity: understanding cost enables better financial judgment and comparison shopping, even if the full formula isn’t explicit.