Question

These jeans are made in Mexico, assembled in the US and retail for $150, but the profit differs considerably depending on whether they're sold online or at a physical store.

OFFLINE
Cost of goods sold
$45
Cost of goods sold
$45
Store payroll 27.00
Freight to retail store 4.50
Rent 22.50
Marketing 15.00
Other retail costs 12.00

Profit
$24.00
16%

ONLINE
Cost of goods sold 45.00
Free standard
shipping & returns 10.00

Warehouse/fulfilment 5.00

Operating costs
(softwaremaintenance) 30.00

Marketing
15.00

Profit
$45.00
30%

1. Excluding the cost of goods sold, what is the largest expense for a business selling jeans
offline and online?

Answer 1

Answer:

Offline store: $27.00

Online Store: $30.00

Explanation:

For offline  store, the other biggest expense is  payroll. Payroll refers to wages and salaries paid to employees.

The store payroll is $27.00

For the online store

The other biggest is the operating cost( software maintenance) at $30.00