Question

Calculate the initial markup percent that will be required to achieve a 6% profit, using the following figures: Net sales Employee discounts Expenses Markdowns Alteration costs Cash discounts Shortages $540,000 $2,900 $180,000 $8,250 1.2% $6,550 $1,800

Answer 1

197.95%

Step-by-step explanation:

Initial markup is the markup placed on merchandise received in order to cover expenses and reductions and to provide a profit

DATA

Net sales = $540,000

Employee discounts = $2,900

Expense = $180,000

Markdown = $8,250

Alteration cost = 1.2%

Cash discounts = $6,550

Shortages = $1,800

Profit = 6%

Retail Reductions = Markdowns + Employee Discounts + Special Customer Discounts + Stock Shortages

Reductions = $8,250 + $2,900 + $6,550 + $1,800

Reductions = $19,500

Initial Markup Percent = (Expenses + Profit + Reductions)

(Net Sales + Reductions)

Initial Markup percent = (33.33%+6%+3.61%)(1%+3.61%)

Initial Markup percent = (42.94%)(4.61% )

Initial Markup percent = 197.95%