Unit 1(1)-1 - Unit 1 Merchandising for a Profit Defining...

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Merchandising for a Profit Unit 1
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Defining the Basic Profit and Loss Factors The function of the retail store is to sell merchandise to consumers at a profit. These sales are the store’s source of operating income . Cost - the price the retailer (buyer) pays for a specific purchase or item. Retail - the price at which stores price the merchandise for sale to the consumer. This operating income is known as net sales or sales volume , is used to designate the size of a particular store or a merchandise department.
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The Five Components of Profit and Loss 1. Net Sales 2. Cost of Goods Sold 3. Gross Margin 4.Operating Expenses 5. Net Profit/ Net Loss
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Net Sales Net Sales - are the sales total after customer returns and allowances have been deducted from gross sales, therefore they represent the amount of goods that actually stay sold. Components of Net Sales: Gross Sales - are the entire dollar amount received for goods sold during a given period. Customer Returns and Allowances - this must be taken into consideration before gross sales can be accurate. This
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Cost of Goods Sold - it is simply the cost of the merchandise that has been sold during a given time period. However, the calculation is complex
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This note was uploaded on 04/02/2012 for the course CTE 4822 taught by Professor Karlarenton during the Spring '12 term at Florida State College.

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Unit 1(1)-1 - Unit 1 Merchandising for a Profit Defining...

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