MARKUP-PROFIT

MARKUP-PROFIT - Markup/Profit HUEC 3043 Initial Markup...

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Markup/Profit HUEC 3043
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Initial Markup Initial Markup: Percent Markup needed to make a profit Calculated based on plan/forecasted figures Helps to determine retail pricing needs Accounts for Reductions Reductions are discounts, markdowns, shortages which will reduce net sales Factor in reductions to make sure the markup percent covers these expenses
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Calculating Initial Markup Formula for Initial Markup: Expenses + Profit + Reductions + Alterations - Cash Discounts Divide that Number by Net Sales + Reductions Can be calculated using percents or dollar figures. Always reported as a percent.
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Initial Markup Need to analyze what numbers you need to calculate Initial Markup These numbers may be “Hidden” or needed to be calculated: Net Sales Expenses (Direct/Indirect) Reductions Alterations Cash Discounts Profit
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Initial Markup Tips for Calculating Initial Markup Net Sales is always 100% Reductions are typically listed out separately, I.e. Employee Discounts, Shortages, Markdowns, etc. (Ex 5-22) Information may be listed as percents and dollar amounts, convert all numbers to either percents or dollar amount. (Ex. 5-23) Customer Returns are not a part of Initial Markup.
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Sample Problem If a buyer is negotiating a new line of Men’s boxer shorts from a vendor, calculate the
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This note was uploaded on 02/14/2012 for the course HUEC 3043 taught by Professor Freeman during the Fall '10 term at LSU.

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MARKUP-PROFIT - Markup/Profit HUEC 3043 Initial Markup...

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