Essentials of Management 9th Edition by Andrew DuBrin

Exercise 2

Tony works full-time as a computer-repair technician who makes onsite repairs for individuals and small businesses. He says his gross profit margin is 94 percent because last year his total revenues were $100,000 and his expenses were $6,000. "I'm actually doing better than Microsoft. They talk about gross profit margins of 80 percent," says Tony. What is wrong with Tony's estimate of his gross profit margin?