I sell a product for $ 1000.00 with 22% margin minus the credit card Fee $5. My net profit?

Question

A particular purchaser is unsatisfied with the product. He disputes the purchase of the product with his credit card company and issues a chargeback. Now I must refund the purchaser his full purchase price as well as incur a chargeback fee of $25.00. What is the net loss to me when a purchase of a product is chargedback? Also, How many additional units of the product must be sold in order to cover the loss of one product that is chargedback?

Answer 1

Your initial profit before credit card fees and charge backs would be $220.00. After refunding the purchase you would incur a total loss on profit of $30.00 meaning you would only need to sell one additional unit to cover that loss but would reduce your margin of profit on that sale from 22% to 19%.

Answer 2

1000 * .22 = 220
5 + 25 = 30

250 net loss of revenue and expenses if you consider the 220 as reveune to be lost. So it is a net loss of 30 but a loss of a sale or profit of 220.

so you need to sell 1 for another 220 profit to cover the 30 or 2 for a 440 profit to coverthe 250.

However if this is an accounting question selling one would offset the expense but in accounting these items would not be directly related because they are two different items. REV's and EXP's.

Answer 3

Has the object been back? If not, contact the mastercard organization. in case your product sells for one thousand with a 22% margin, your value is one thousand/a million.22, or purely over 800. yet it is doing the issue backwards: you don't know your margin till you know your expenses. also, be particular once you're counting expenses to shop song of what's variable (value to make one unit of product and get it out the door) and what's fixed (value of creating, electricity, equipment depreciation, etc. etc.) Your finished value typically is the variable value plus an "perfect" area of the fixed value; the rates are there because there is a few leeway in determining what "perfect" ability. Do you spread the fixed value over your maximum achieveable production, your modern-day production, some previous production, or some thing else? you want to imagine about this somewhat and then have a cranium consultation with your bookkeeper or a CPA. As for the question of loss, once you get the product back, is it resellable? want refurbishing to be resellable? those should be responded earlier you could figure loss.

Answer 4

181 .... the product final cost is 1000, if you are obtaining 22% of profit out of it, its because it costed 780 ...($1000 - 22%) ....

now i suppose the cc fee is 5% out of this 780 .... which mean 39

that will give you a total cost of 819... if you sell it by 1000

a 1000 - 819 = 181 ... thats your total profit

Answer 5

lol homework started early
1000.00 X .22 = ? - 5.00 = net profit.
.22=22%

25.00 + 5.00 = net lost

net profit -net lost = ?

these are your formulas have fun.

(Catch them a fish and feed them for a day,
Teach them to fish and feed them for life.)