Sophia Marren

Professor Roberts
October 18, 2016
MFD 306

Chapter 5 Case Study #2

1. A) Initial Markup %: 35%+4.5%+12% = 45.98%

100% + 12%
B) Initial Retail Price: Sweaters- $32/ (100%-45.98%)=$59.24
Blouses- $24/ (100%-45.98%)=$44.43

2. A price Christy could use for her sweaters would be a price like $60 or a little above it, and
then for the blouses to put them at a price of $45 or above. It will help her get prices that are a t a
max. profit. Christy will then gain profit and it will be small enough for her customers to come
back when purchasing the merchandise. The price will make it easier for everyone since it is
rounded to the nearest dollar amount.
3.
Cost Retail
24 * 32= $768 59.24 * 24= $1421.76
36 * 24=$864 44.43 * 36=$1599.48
12 * 20= $240 12 * 42= $504
18 * 18= $324 18 * 38=$684

Total Cost= $2196 Total Retail=$4209.24

2196/4209.24=52.17%
100%-52.17%=47.83% (average markup percent)

4. Average markup works with total retail and cost, markups can be average on a stock of goods,
and one to many purchases. The store wants 51.6% markup and the average markup is 47.83%.
Both of those markups are close to each other but not close enough. What can be done to bring
the markup percent closer to the desired goal is that you can increase initial markup and raise the
retail price in the store.