1.

Calculate the initial markup percent for the following situations:

a. Sales = $60,000
Expenses = $25,000
Profit goal = $8,000

Initial markup percentage= Expenses + Profit + Reduction- Cash discounts

Sales + Reduction

= ($25,000+$8,000+0)/($60,000+0)
=55%

b. Expenses = 38%
Reductions = 10%
Cash discounts = 1%
Profit goal = 5%

Initial markup percentage= Expenses + Profit + Reduction- Cash discounts

Sales + Reduction

= (0.38+0.10+0.05-0.01)/(1.00+0.1)
=47.27%

c. Sales = $185,000
Reductions = $12,000
Expenses = $53,000
Cash discounts = $18,000
Profit goal = $15,000

Initial markup percentage= Expenses + Profit + Reduction- Cash discounts

Sales + Reduction

= ($53,000+$15,000+$12,000-$18,000)/($185,000+$12,000)
=31.47%

d. Profit goal = 7%
Reductions = 18%
Cash discounts = 4%
Expenses = 33%

Initial markup percentage= Expenses + Profit + Reduction- Cash discounts

Sales + Reduction

= (0.33+0.07+0.18-0.04)/(1.00+0.18)
= 45.76%
2. Calculate the retail price for the following situations:

a. Markup percent = 45%

Cost = $14

Retail Price = Cost + Markup

Cost Percent= 100%-45%=55%

We know that 55% 0f retail price equals $14

=0.55 * retail price= $14
Retail Price= $14/0.55
= $25.45

b. Markup percent = 60%

Cost = $2

Retail Price = Cost + Markup

Cost Percent= 100%-60%=40%

We know that 40% 0f retail price equals $2

=0.40 * retail price= $2
Retail Price= $2/0.40
= $5

3.Calculate the (1) amount of markdown in dollars, (2) markdown cancellations,

and (3) markdown percent for the following situation:

1. Situation One
Markdown in dollars= Original Retail- Sale price
=$50-$40
=$10

Markdown Cancellations= (On hand-sold) X (Original retail price-Sale price)

= (36-20)*($50-$40)
=160

Markdown in Percent= Dollar Markdown/ Total Sales

= $10 / (20*$40)
= 1.25%

2. Second Situation

Markdown in dollars= Original Retail- Sale price

=$35-$27
= $8

Markdown Cancellations= (On hand-sold) X (Original retail price-Sale price)

= (36-20)*($35-$27)
= 128

Markdown in Percent= Dollar Markdown/ Total Sales

= $8 / (20*$27)
= 1.48%

3c. Third Situation

Markdown in dollars= Original Retail- Sale price

=$30-$20
= $10

Mark down Cancellations= (On hand-sold) X (Original retail price-Sale price)

= (48-25)* ($30-$20)
= 230

Markdown in Percent= Dollar Markdown/ Total Sales

= $10 / (20*$25) = 1.25%
=2%

3d. Fourth Situation

 Markdown in dollars= Original Retail- Sale price
=$20-$15
= $5

Markdown Cancellations= (On hand-sold) X (Original retail price-Sale price)

= (52-15)* ($20-$15)
= 185

Markdown in Percent= Dollar Markdown/ Total Sales

= $5 / (15*$15)
= 2.22%

4. Calculate the off-retail percent that can be advertised for the following
situations:

a. Original retail = $50

Sales price = $35

Off Retail Percent= Markdown/Original Retail Price

Mark down= Original retail- Sale price

= $50- $35
= $15
Off Retail Percent= $15/$50
= 30%

b. Cost = $25
Initial markup = $25
Markdown = $5

Off Retail Percent= Markdown/Original Retail Price

Retail Price= Cost + Mark up

= $25+$25
=$50
Off Retail Percent= $5/$50
= 10%

c. Cost = $125
Initial markup = $120
Sales price = $230

Off Retail Percent= Markdown/Original Retail Price

Retail Price = Cost + Mark up

= $125+$120
=$ 245
Markdown= Retail price-sale price
= $245-$230 =$15
Off Retail percent= $15/$245
= 6.12%