Betermine the IMU% needed for this department
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Transcribed Image Text:**Determining the Initial Markup Percentage (IMU%) for the Women's Sportswear Department**
The women's sportswear department has net sales of $175,000 and alteration costs of $2,000. To determine the IMU% needed, consider the following figures:
- **Profit:** 3.8%
- **Shortages:** $1,000
- **Expenses:** $66,000
- **Employee Discounts:** 1.2%
- **Markdowns:** 3.5%
- **Cash Discounts:** $4,375
**Objective:** Calculate the initial markup percentage required for this department.
Expert Solution
Step 1
IMU- Initial Markup is the percentage of markup on the cost of goods sold. That means it is the difference amount between the sale price and its initial cost to purchase or produce it.
IMU% in general= (Actual operating expenses+ Actual profit-Cash discounts)/Actual net Sales*100
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
Recommended textbooks for you
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education