**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.

Answered: Betermine the IMU% needed for this…

Business

Accounting

Betermine the IMU% needed for this department

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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Question

**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

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