If an item costs $85 and is sold for $150, what is the gross margin in dollars?

To determine the gross margin in dollars, you subtract the cost of the item from its selling price. In this scenario, the item costs $85 and is sold for $150.

The calculation is as follows:

Gross Margin = Selling Price - Cost

Gross Margin = $150 - $85

Gross Margin = $65

This means that the gross margin, which represents the profit before accounting for other expenses, is indeed $65. This figure is crucial in evaluating the profitability of the item and is often used by retailers to gauge the effectiveness of their pricing strategies and overall merchandising practices.