In my opinion it should be bit greater than 1.6%. Manufacturers, retailers, and the service industry use this as a measure of the profitability of individual goods and services. / revenue x 100 = gross profit margin. “Cost” in this equation, also known as prime cost, is the total cost of materials and labour required to provide a service or manufacture a good. Only direct materials and direct labour are to be considered here. Indirect materials and indirect labour are important operating expenses to track, but they are not part of the gross profit margin calculation. Direct materials can be tricky to add up, and there is a lot of variation between operators. The total direct materials cost in our example is $149.33. A single-unit crown gives us an 86% gross profit margin. Put another way, 86% of our crown fee is our profit after paying for our assistant’s time and our crown materials.
You can read more here: https://www.dentaleconomics.com/practice/article/16389638/gross-profit-margin-an-underutilized-tool-in-managing-profitability
Besides if you do have any questions give me a call: https://clarity.fm/joy-brotonath