week 3
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School
Southern New Hampshire University *
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Course
225
Subject
Industrial Engineering
Date
Dec 6, 2023
Type
xlsx
Pages
15
Uploaded by kelilovesbfava
RETAIL PRICING AND REPRICING OF MERCHANDISE (MARKUP)
Basic Markup Equations Used in Buying Decisions
A. Basic Markup Percentage Equations
1. Calculating Markup % on Retail
Using the Retail Method of Inventory
Markup %
$markup
retail
markup %
#DIV/0!
2. Calculating Markup % on Cost
Markup %
$ markup
cost
markup %
#DIV/0!
3. Calculating Markup % when cost and retail are known
a. when individual cost and individual retail are known
individual retail
- individual cost
$ markup
0
markup %
#DIV/0!
b. when total purchase cost and total purchase retail are known
total retail
- total cost
$ markup on entire purchase
0
markup %
#DIV/0!
4. Calculating Markup % on a group of items with varying costs or retail prices (i.e., order writing)
$ cost
Item A
Item B
Item C
Item D
Total
$0.00
markup %
5. Calculating markup % with varying retail prices that have the same cost
Merchandise
no. pieces
portion A
portion B
portion C
total
0
markup% on entire purchase
6. Calculating markup % on merchandise with varying costs at the same retail price
no.pieces
Merchandise A
Merchandise B
Merchandise C
total
markup % on enitre purchase
B. Basic $ Markup Calculations Used in Buying Decisions
1. Finding Retail when Cost and Markup % are Known
retail
cost
markup %
0
2. Finding Cost when Retail and Markup % are known
cost
retail
markup %
cost
0
$ retail
$markup
$0.00
$0.00
#DIV/0!
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unit cost
total cost
unit retail
total retail
markup
same
#VALUE!
$0.00
same
#VALUE!
$0.00
same
#VALUE!
$0.00
same
#VALUE!
$0.00
#VALUE!
#VALUE!
unit cost
total cost
unit retail total retail
markup
$0.00
same
#VALUE!
$0.00
same
#VALUE!
$0.00
same
#VALUE!
$0.00
same
#VALUE!
#VALUE!
#VALUE!
RETAIL PRICING AND REPRICING OF MERCHANDISE (MARKUP)
Cost
$34.00
Cost
$325.00
Retail
$45.99
Retail
$74.00
Retail
$59.00
Retail
$49.00
Retail
$249.00
Markup Practice Problems
Calculate the cost price given the retail and the planned MU %
Retail $
$118.00
Retail $
$550.00
1. If the men’s buyer purchases
pants
at a cost of $34.00 and has a
markup of $33.00, what will be the
retail price
for each pair of pants?
2. If the electronics buyer purchases televisions at a cost price of
$325.00 and the markup is $249.99, what is the
retail price
for the
televisions
?
3. The misses sweater buyer retails cotton sweaters for $45.99, and
the markup is $24.24. What is the
cost price
of each
sweater?
4. A man’s
belt
retails for $74.00, and the markup is $43.00. What is
the
cost price
?
5. Calculate the
markup dollars
for a
tie
if the cost is $23.60 and the
manufacturer’s suggested retail price is $59.00.
6. If a necklace retails for $49.00 and the cost is $14.70, what is the
markup
in dollars and percentage at retail for the
necklace
?
7. If a pair of brand-name leather
boots
has a retail price of $249.00
and the cost is $125.00, what is the
markup
for the boots in both
dollars and percentage at retail?
8. A pair of sneakers will be ticketed with a retail price of $118.00 and
the markup % is 54.0%. What is the
cost price
for the
sneakers
?
9. What is the
maximum cost
a buyer can pay for a
coat
that will sell
for $550 with a markup of 56.0%?
Retail $
$19.99
Retail $
a. Sneakers, 54.4% markup; Retail price $89.00.
$89.00
b. Men’s ties, 65.7% markup; Retail price $38.00.
Retail $
$38.00
c. Boy's apparel, 47.9% markup; Retail price $14.00
Retail $
$14.00
Calculate the retail price given the cost and the planned MU%
Cost $
$25.20
Cost $
$37.85
Cost $
$8.95
Cumulative Markup Practice Problems
Description
10. You are the jewelry buyer for a large mass-market chain. For the
holiday season, you are planning a boxed jewelry “Gifts to Go”
promotion for $19.99. The markup for the promotion is planned at
43.0%. What is the maximum
cost price
that you will pay for the
boxed jewelry
?
11. Given the following departmental markups and average retails per
department
, what is the
maximum cost
that the buyer can pay?
12. An eye shadow compact costs $25.20, and the markup is 40.0%.
What is the
retail price
of the
compact
?
13. A buyer will purchase sweaters at a cost of $37.85, and the
planned MU % for the department is 62.0%. What is the minimum
retail price
for each
sweater
? What possible retail price for each
sweater might be used if you were the buyer of a department store?
What about an off-price retailer?
14. If a graphic T-shirt costs $8.95 and the MU % is 53.4%, what is the
retail price
for the
T-shirt
? What would the pricing strategy be?
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Zip Top
Messenger
Backpack
MU $ =
MU $ =
MU % =
MU % =
Quantity
12,000
MU $= Retail -Cost
MU $=
$498,000.00
MU %= MU $/ Retail $
8,000
MU $= Retail -Cost
MU $=
$372,000.00
MU %= MU $/ Retail $
c. Calculate the CMU % for the total buy.
Total Cost
CMU $ =Total Retail -Total Cost
$650,000.00
CMU %=CMU $/Total Retail $
Cumulative Markup Application Practice Problems
15. A buyer purchased 50 assorted leather
briefcases
that cost
$79.50 each and establishes retail prices based on the style as
follows:
• 15 zip-top briefcases to retail for $175 each.
• 20 messengers to retail for $150 each.
• 15 backpacks to retail for $125 each.
Find the
cumulative markup percentage
on this purchase.
16. The sweater buyer is buying 12,000 cashmere crew neck and
8,000 V-neck sweaters at a cost of $32.50. The buyer plans to retail
the sweaters as follows:
Crew neck to retail at $74.00; V-neck to retail at $79.00
a.
Calculate the
IMU
$ and IMU % for the
crew neck
.
b.
Calculate the IMU $ and IMU % for the V- neck.
17. The
jewelry
buyer wants to spend $25,000 at retail. The
department maintains a 76.7% markup. The buyer needs a minimum
of 600 pairs of earrings to cover each branch with an
adequate
assortment
.
Retail Budget
$25,000
b. What should be the cost per pair?
Retail
$25.00
Cost
$9,980.00
Plan/Budget
$22,560.00
a. What should be the retail price per pair?
18. For a monthly
T-shirt
buy, you will be spending $22,560 at retail.
Orders for $9,980 at cost have been placed. The planned MU % is
51.5%. What is left in
retail dollars
for you to place?
Markup
Retail
$33.00
$67.00
Markup
Retail
$249.99
$574.99
Markup
Cost
$24.24
$21.75
Markup
Cost
$43.00
$31.00
Cost
MU $
$23.60
$35.40
Cost
MU $
MU %
$14.70
$34.30
70.0%
Cost
MU $
MU %
$125.00
$124.00
49.8%
Cost %
Cost $
46
$54.28
Cost %
Cost $
44
$242.00
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Cost %
Cost $
57.0
$11.39
Cost %
Cost $
45.5955056179775
$40.58
Cost %
Cost $
34.2894736842105
$13.03
Cost %
Cost $
52.0714285714286
$7.29
Mark Up Cost
Retail $
10.08
$35.28
Cost %
Retail $
Pricing Strategies
0.38
$99.61
Dept store: $
150
inimum retail price
Off price retailer: $
100
ust above minimum
Cost %
Retail $
Pricing Strategies
0.47
$19.21
$
20-30 y and type of store
Quantity
Unit Cost
Total Cost
Unit Retail
15
$79.50
$1,192.50
$175.00
20
$79.50
$1,590.00
$150.00
15
$79.50
$1,192.50
$125.00
TOTAL
$3,975.00
Total Retail -Total Cost
$3,525.00
MU $/total retail $
47.0%
Unit Cost
Total Cost
Unit Retail
Total Retail
$32.50
$390,000.00
$74.00
$888,000.00
or
$0.56
56.0%
$32.50
$260,000.00
$79.00
$632,000.00
or
$0.59
59.0%
Total Retail
CMU $
CMU %
$1,520,000.00
$870,000.00
57.2%
Units
Retail Price
600
$41.67
Cost %
Cost Price
23.3
$9.71
Cost %
48.5
Retail Budget
Spent
Over/Under
$12,580.00
under
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Total Retail
$2,625.00
$3,000.00
$1,875.00
$7,500.00
Correct formula and answer
One or more formula errors
Wrong formula or no formula
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