4) Big Foot recorded a gross margin of 55% in last year. If cash discounts of the store were 2% while alteration costs were 1% of its net sales in last year, what was the maintained markup percentage Big Foot achieved in last year?

4) Big Foot recorded a gross margin of 55% in last year. If cash discounts of the store were 2% while alteration costs were 1% of its net sales in last year, what was the maintained markup percentage Big Foot achieved in last year?

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Concept explainers

Conversion Cycle

Conversion cycle is also known as cash cycle or net operating cycle. Conversion cycle refers to how much time a company takes to turn its investments which is done from stock or any other financial resources into cash flows from sales.

Question

4) Big Foot recorded a gross margin of 55% in last year. If cash discounts of the store were 2% while
alteration costs were 1% of its net sales in last year, what was the maintained markup percentage Big Foot
achieved in last year?

Expert Solution

Step 1

Calculating the initial markup is taking the original retail price minus cost dividend by original retail price

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