Sales and Gross Margin Exercise

Sales and Gross Margin Exercise

Criteria Handbags Handbag MD Clutches Clutches MD Shoes Shoes MD Accessories Accessories MD MD

1 Annual sales % 20% 5% 19% 6% 30% 5% 10% 5%

2 Annual sales $ $44,000 $11,000 $41,250 $13,750 $65,450 $11,550 $21,450 $11,550
3 Avg. cost each $ 101.80 $ 101.80 $ 43.00 $ 43.00 $ 82.60 $ 82.60 $ 13.00 $ 13.00
4 Bags, wraps $ 2.00 $ 2.00 $ 2.00 $ 2.00 $ 3.00 $ 3.00 $ 1.00 $ 1.00
5 TOTAL COST EACH $ 103.80 $103.80 $ 45.00 $45.00 $ 85.60 $85.60 $ 14.00 $14.00

6 Avg retail each $173 $86.50 $90 $54.00 $107 $53.50 $35 $14.00
7 Gross profit $ each $ 69.20 ($17.30) $ 45.00 $ 9.00 $ 21.40 ($32.10) $ 21.00 $0.00
8 Gross profit % each 40.0% -20.0% 50.0% 16.7% 20.0% -60.0% 60.0% 0.0%
9 Reciprocal % 60% 50% 80% 40%

GROSS PROFIT $ 17,600.00 $ (2,200.00) $20,625.00 $ 2,291.67 $13,090.00 $ (6,930.00) $ 12,870.00 $ -

GROSS MARGIN

Note: abbreviation MD stands for markdown

Retail price points at regular price are rounded to replicate typical store pricing
 Sales and Gross Margin Exercise

TOTAL

100%

$220,000

$ 57,346.67

26.1%

Note: abbreviation MD stands for markdown

Retail price points at regular price are rounded to replicate typical store pricing