SlideShare a Scribd company logo
1 of 27
FMM 225 Key Concepts and Formulas
Billed Cost
· Billed cost = List price minus trade discounts(s)
· Billed cost = # Units purchased
Book Inventory
· Book inventory at retail = Physical inventory + Net retail
purchases (Total merchandise handled) + Other stock additions
Net sales Markdown differences Other deductions from stock
· Book inventory at cost Opening retail book inventory (100%
Cumulative markup % achieved on stock Purchases)
Build/Percentage Change/Trend
· Build/percentage change/trend = × 100
· Build/percentage change/trend = × 100
Cost (Markup Formulas)
· Cost $
· Cost % =
· Cost %
· Cost %
· Cost $
Cost of Goods Sold
· Total cost of goods sold $ Billed cost $ + Inward freight
charges $ + Workroom cost $ minus Cash discount $
·
· Cost of goods sold $
Customer Returns and Allowances
· Customer returns and allowances $ Total of all refunds or
credits to the customer on individual items of merchandise $
Number of units actually returned
· Customer returns and allowances %
· Customer returns and allowances $ Gross sales $ Customer
returns and allowances % and allowances $
Cumulative Markup %
· Cumulative markup % 100
Department’s Net Sales
· Department’s net sales % of total stores sales
Gross Margin
· Gross margin = Net sales
· Gross margin $ = Gross margin %
· Gross margin % = × 100
Gross Margin %
· Gross margin % 100
· Gross margin % 100
· Gross margin % 100
Gross Sales
· Gross sales Total of all prices charged to consumers of
individual items Number of units actually sold
Gross Sales $
Initial Markup %
· Initial markup %
· Initial markup %
· Initial markup %
Maintained Markup %
· Maintained markup % 100
· Maintained markup % 100
· Maintained markup % Initial markup % Retail reduction %
(100% Initial markup %)
· Purchase balance Total planned Purchases to date (pieces,
retail, cost, or markup %)
Markdown
· Markdown $ Original or present retail price $ New retail
price $
· Markdown $ Percentage off Present retail price $
· Total markdown $ First total $ markdown Second total $
markdown
· Planned Markdown $ N Markdown %
· Markdown %
· Markdown %
· Markdown cancellation Higher retail $ Markdown price $
· New Markdown $ Gross markdown $ Markdown canellation$
Markup
· Markup $ Retail $ Cost $
· Markup % on retail 100 or 100
· Markup % on retail 100 or 100
· Cumulative retail markup % on entire purchase
· 100 or 100
Net Cost
· Net cost $ = Billed cost $ Cash discount $
· Net cost $ = List price $ Trade discount(s) $ Cash discount $
Net Profit
· Net profit = Net sales
· Net operating profit = G
· Net profit $ = Net profit $
· Net profit% = × 100
Net Sales
· Net Sales $ = Gross sales $ Customer returns and allowances $
Operating Expenses
· Operating expenses = D
· Operating expenses $ = O
· Operating expenses = × 100
Retail
· Retail $ Cost $ Markup $
· Retail % Cost % Markup %
· Retail $ or
Retail Reduction %
· Retail reduction %
Sell Through Percentage
· Sell through %
· Shortage or overage
· Shortage (or overage) $ Closing book inventory at retail $
Physical inventory count at retail $
· Shortage %
· Planned dollar shortage Planned shortage percentage Planned
net sales $
Weeks of Supply
· Weeks of Supply
FMM 225
Key Concepts and Formulas
B
illed C
ost
·
Billed cost = List price minus
trade discounts(s)
·
Billed cost = # Units purchased
×
Invoice
cost
Book I
nventory
·
Book inventory at retail = Physical inventory + Net retail
purchases (Total merchandise handled) +
Other stock additions
-
Net sales
-
Markdown differences
-
Other deductions from stock
·
Book inventory at cost
=
Opening retail book inventory
×
(100%
-
Cumul
ative markup % achieved
on stock
+
Purchases)
Build/Percentage Change/T
rend
·
Build/percentage change/trend =
This
year
sales
-
last
year
sales
last
year
sales
× 100
·
Build/percentage change/trend =
This
year
sales
-
last
year
sales
planned
sales
× 100
Cost
(Markup F
ormulas)
·
Cost $
=
Retail
$
-
Markup
$
·
Cost % =
Cost
$
Retail
$
×
100
·
Cost %
=
Retail
%
-
Markup
%
·
Cost %
=
100%
-
Markup
%
·
Cost $
=
Retail
$
×
100%
-
Markup
%
)
Cost of Goods Sold
·
Total cost of goods sold $
=
Billed cost $ + Inward freight charges $ +
Workroom cos
t $ minus
Cash
discount $
·
Cost
of
goods
sold
%
=
Cost
of
goods
sold
$
Net
sales
$
×
100
·
Cost of goods sold $
=
Cost
of
goods
%
×
Net
sales
$
Customer Returns and A
llowances
·
Customer returns and allowances $
=
Total of all refunds or credits to the customer on individual
items of merchandise $
×
Number of units actually returned
·
Customer returns and allowances %
=
customer
returns
and
allowances
$
gross
sales
$
×
100
·
Customer returns and allowances $
=
Gross sale
s $
×
Customer returns and allowances % and
allowances $
Cumulative M
arkup %
·
Cumulative markup %
=
Cumulative
markup
$
Cumulative
retail
$
×
100
Department’s Net S
ales
FMM 225 Key Concepts and Formulas
Billed Cost
minus trade discounts(s)
Book Inventory
purchases (Total merchandise handled) +
Other stock additions -Net sales - Markdown differences - Other
deductions from stock
(100% - Cumulative markup % achieved
on stock + Purchases)
Build/Percentage Change/Trend
This year sales -last year sales
last year sales
× 100
This year sales -last year sales
planned sales
× 100
Cost (Markup Formulas)
-Markup $
Cost $
Retail $
×100
-Markup %
-Markup %
etail $×100% -Markup %)
Cost of Goods Sold
charges $ + Workroom cost $ minus Cash
discount $
Cost of goods sold $
Net sales $
×100
goods % ×Net sales $
Customer Returns and Allowances
credits to the customer on individual
items of merchandise $ × Number of units actually returned
customer returns and allowances $
gross sales $
×100
Customer returns and allowances % and
allowances $
Cumulative Markup %
Cumulative markup $
Cumulative retail $
× 100
Department’s Net Sales
Module Two:
Merchandising for a Profit
1
Recognize the importance of profit calculations in
merchandising decisions
Identify the components of a profit and loss statement,
including calculations of the following:
Net sales
Cost of goods sold
Gross margin
Expenses
Net profit
Objectives
Complete a profit and loss statement
Identify types of business expenses and their impact on profit
Use profit calculations to:
Make comparisons between departments and stores
Detect trends
Make changes in merchandising strategy to achieve an increase
in profits
Objectives (continued)
Alteration and workroom costs
Balance sheet
Billed cost
Build/percentage change/trend
Cash discounts
Closing inventory
Contribution
Controllable expenses
Controllable margin
Cost
Cost of goods sold (COGS)/cost of merchandise sold
Customer allowance or markdown
Customer returns
Customer returns and allowances
Direct expenses
Final profit and loss statement
Key Terms
Gross margin
Gross sales
Income statement
Indirect expenses
Inward freight
Net loss
Net operating profit
Net profit
Net sales
Opening inventory
Operating expenses
Operating income
Profit and loss statement
Reductions
Retail
Sales volume
Skeletal profit and loss statement
Total cost of goods purchased
Total cost of goods sold
Total merchandise handled
Key Terms
Key Concept Formulas
Cost of Goods Sold
Total cost of goods sold $ Billed cost $ + Inward freight
charges $ + Workroom cost $ - Cash discount $
Cost of goods sold $
Billed cost
Billed cost = List price – trade discounts(s)
Billed cost = # Units purchased
Key Concept Formulas
Customer Returns and Allowances
Customer returns and allowances $ Total of all refunds or
credits to the customer on individual items of merchandise $
Number of units actually returned
Customer returns and allowances %
Customer returns and allowances $ Gross sales $ Customer
returns and allowances % and allowances $
Key Concept Formulas
Department’s Net Sales
Department’s net sales % of total stores sales
Gross sales
Gross sales Total of all prices charged to consumers of
individual items Number of units actually sold
Gross sales $
Net Cost
Net cost $= Billed cost $ Cash discount $
Net cost $= List price $ Trade discount(s) $ Cash discount $
Net Sales
Net Sales $ = Gross sales $ Customer returns and allowances $
Key Concept Formulas
Key Concept Formulas
Build/Percentage Change/Trend
Build/percentage change/trend = × 100
= × 100
Gross Margin
Gross margin = Net sales
Gross margin $ = Gross margin %
Gross margin % = × 100
Key Concept Formulas
Operating Expenses
Operating expenses = D
Operating expenses $ = O
Operating expenses = × 100
Net Profit
Net profit = Net sales
Net operating profit = G
Net profit $ = Net profit $
Net profit% = × 100
Use of Profit Calculations
Exchange data and compare stores to determine relative
strengths and weaknesses.
Indicate the direction of the business and whether it is
prosperous, struggling for survival, or bankrupt.
Provide a statement for analysis so that knowledgeable changes
in management or policy can be made.
Improve the profit margin by using this analysis.
Profit Components
Retail store sells merchandise to consumers at a profit
Buyer is responsible for creating the merchandise assortment
Selecting merchandise is determined after planning and analysis
of what sold in a previous time period
Need to determine what, when, where, and how much to buy and
what to pay for these purchases
Cost: Amount the retailer/buyer pays for these purchases
Retail: Price stores offer merchandise for sale to the consumer
Defining the Basic Profit Factors
Net Sales: How much merchandise has been sold in dollars
Cost of Goods Sold (COGS): The amount paid for the goods
sold
Gross Margin (GM): Resulting amount when COGS is
subtracted from net sales
Operating Expenses: Expenses incurred in buying/selling
process other than the cost of goods
Net Profit: Resulting amount when expenses are subtracted from
GM
Defining the Basic Profit Factors
Gross sales: The entire dollar amount received for goods sold
during a given period before any reductions are taken. Can also
be though of as the total sales based on the initial or regular
retail price.
Reductions:
Customer returns: When merchandise is returned and the
customer receives a refund.
Customer allowance or markdown: Price reduction given to a
customer.
Net sales: Sales total after all reductions have been deducted
from gross sales. Amount of sales collected from the sale of
merchandise that actually remains sold. More significant sales
figure.
Defining the Basic Profit Factors
Cost of Goods Sold (COGS): Cost of merchandise that has been
sold during a given period
Cost or purchase: Price that appears on the purchase
order/invoice
Inward freight: Amount a vendor charges for transporting
merchandise to the retailer
Alteration and workroom costs: Charge to a department to get
merchandise ready for sale
Cash discounts: Percentage or dollar amount deducted from the
invoiced cost that was negotiated between the buyer and vendor
Defining the Basic Profit Factors
Gross Margin (GM): The buyer’s measure of profitability. To
maximize GM, buyers need to:
Drive sales
Negotiate the best cost price
Operating expenses:
Direct: Specific to a given department and would end if
department was discontinued
Indirect: Store expenses that exist whether a department is
added or discontinued
Defining the Basic Profit Factors
Gross Sales: Total initial dollars received for merchandise sold
during a given period
Concept:
Gross sales $ = Total of all the initial prices charged ×
Number of units
to consumers on individual items actually sold
Problem:
During the week (Sunday through Saturday), a toy department
sold 30 dolls (Group A) priced at $15 each; 25 dolls (Group B)
priced at $25 each; and 5 dolls (Group C) priced at $30 each.
What were the gross sales for the dolls for that week?
Sales
Solution
(Arithmetic):
30 dolls @ $15 each = $450
25 dolls @ $25 each = $625
5 dolls @ $30 each = $150
Total gross sales = $1,225
Sales
Customers can receive the following from a retailer:
Refund of the purchase price
Reduction to the selling price
These transactions result in a cancellation of the gross sale and
inventory value.
Reductions (markdowns) to the selling price are commonplace
in retailing today.
Customer Returns and Allowances
Concept:
Customer returns = Total of all refunds or credits ×
Number of units
And allowances $ to the customer on individual
actually returned
items of merchandise $
Problem:
On Saturday, the junior petite department refunded $98 for one
leather jacket;
$75 each for two wool skirts; and $55 each for two knit tops.
Other returns for the week amounted to $400, and the weekly
total of markdowns given was $1,687. What was the dollar
amount of customer returns and allowances for Saturday? For
the week?
Customer Returns and Allowances
FMM 225 Key Concepts and FormulasBilled Cost· Billed cost = Li.docx

More Related Content

Similar to FMM 225 Key Concepts and FormulasBilled Cost· Billed cost = Li.docx

Marketing II: Zuby Singh on Break Even Analysis
Marketing II: Zuby Singh on Break Even AnalysisMarketing II: Zuby Singh on Break Even Analysis
Marketing II: Zuby Singh on Break Even AnalysisLaurence Patrick Noonan
 
Managerial accounting
Managerial accounting   Managerial accounting
Managerial accounting College
 
Brief Introduction to COST ACCOUNTING.pdf
Brief Introduction to COST ACCOUNTING.pdfBrief Introduction to COST ACCOUNTING.pdf
Brief Introduction to COST ACCOUNTING.pdfssusercee0e4
 
Break even analysis Final.pptx
Break even analysis Final.pptxBreak even analysis Final.pptx
Break even analysis Final.pptxPuneetGarg111103
 
Aqa bus2-measuringimprovingprofit
Aqa bus2-measuringimprovingprofitAqa bus2-measuringimprovingprofit
Aqa bus2-measuringimprovingprofitPeter Sammons
 
Absorption/Variable Costing and Cost-Volume-Profit Analysis
Absorption/Variable Costing and Cost-Volume-Profit AnalysisAbsorption/Variable Costing and Cost-Volume-Profit Analysis
Absorption/Variable Costing and Cost-Volume-Profit Analysisnarman1402
 
Lecture 15 CVP analysis_ Breakeven point.pptx
Lecture 15 CVP analysis_ Breakeven point.pptxLecture 15 CVP analysis_ Breakeven point.pptx
Lecture 15 CVP analysis_ Breakeven point.pptxchetan771658
 
Inventory Estimation Techniques
Inventory Estimation TechniquesInventory Estimation Techniques
Inventory Estimation TechniquesMang Engkus
 
accounts formula
accounts formulaaccounts formula
accounts formulaLalith269
 
CVP , BEP and OL.pptx
CVP , BEP and OL.pptxCVP , BEP and OL.pptx
CVP , BEP and OL.pptxMelatHailu3
 
Akaun Chapter 5
Akaun Chapter 5Akaun Chapter 5
Akaun Chapter 5WanBK Leo
 
Aprenda a formar_preco_de_venda
Aprenda a formar_preco_de_vendaAprenda a formar_preco_de_venda
Aprenda a formar_preco_de_vendaIsabela Freitas
 
How to analyze profitability
How to analyze profitabilityHow to analyze profitability
How to analyze profitabilityIvan Shamaev
 
Finance and Business Case Essentials for Product Managers
Finance and Business Case Essentials for Product ManagersFinance and Business Case Essentials for Product Managers
Finance and Business Case Essentials for Product ManagersJeremy Horn
 

Similar to FMM 225 Key Concepts and FormulasBilled Cost· Billed cost = Li.docx (20)

Marketing II: Zuby Singh on Break Even Analysis
Marketing II: Zuby Singh on Break Even AnalysisMarketing II: Zuby Singh on Break Even Analysis
Marketing II: Zuby Singh on Break Even Analysis
 
Managerial accounting
Managerial accounting   Managerial accounting
Managerial accounting
 
Brief Introduction to COST ACCOUNTING.pdf
Brief Introduction to COST ACCOUNTING.pdfBrief Introduction to COST ACCOUNTING.pdf
Brief Introduction to COST ACCOUNTING.pdf
 
Bottom Line Improvement
Bottom Line ImprovementBottom Line Improvement
Bottom Line Improvement
 
Break even analysis Final.pptx
Break even analysis Final.pptxBreak even analysis Final.pptx
Break even analysis Final.pptx
 
Aqa bus2-measuringimprovingprofit
Aqa bus2-measuringimprovingprofitAqa bus2-measuringimprovingprofit
Aqa bus2-measuringimprovingprofit
 
Absorption/Variable Costing and Cost-Volume-Profit Analysis
Absorption/Variable Costing and Cost-Volume-Profit AnalysisAbsorption/Variable Costing and Cost-Volume-Profit Analysis
Absorption/Variable Costing and Cost-Volume-Profit Analysis
 
Lecture 15 CVP analysis_ Breakeven point.pptx
Lecture 15 CVP analysis_ Breakeven point.pptxLecture 15 CVP analysis_ Breakeven point.pptx
Lecture 15 CVP analysis_ Breakeven point.pptx
 
Merchandising
MerchandisingMerchandising
Merchandising
 
4 marginal cost
4 marginal cost4 marginal cost
4 marginal cost
 
Inventory Estimation Techniques
Inventory Estimation TechniquesInventory Estimation Techniques
Inventory Estimation Techniques
 
accounts formula
accounts formulaaccounts formula
accounts formula
 
CVP , BEP and OL.pptx
CVP , BEP and OL.pptxCVP , BEP and OL.pptx
CVP , BEP and OL.pptx
 
Akaun Chapter 5
Akaun Chapter 5Akaun Chapter 5
Akaun Chapter 5
 
Break even points
Break even pointsBreak even points
Break even points
 
Accounting Ratios
Accounting RatiosAccounting Ratios
Accounting Ratios
 
Aprenda a formar_preco_de_venda
Aprenda a formar_preco_de_vendaAprenda a formar_preco_de_venda
Aprenda a formar_preco_de_venda
 
Breakeven analysis
Breakeven analysisBreakeven analysis
Breakeven analysis
 
How to analyze profitability
How to analyze profitabilityHow to analyze profitability
How to analyze profitability
 
Finance and Business Case Essentials for Product Managers
Finance and Business Case Essentials for Product ManagersFinance and Business Case Essentials for Product Managers
Finance and Business Case Essentials for Product Managers
 

More from keugene1

Following all Discussion guidelines, in your own words and in de.docx
Following all Discussion guidelines, in your own words and in de.docxFollowing all Discussion guidelines, in your own words and in de.docx
Following all Discussion guidelines, in your own words and in de.docxkeugene1
 
Follow-Up Post Peer ResponsePlease write a minimum of five c.docx
Follow-Up Post Peer ResponsePlease write a minimum of five c.docxFollow-Up Post Peer ResponsePlease write a minimum of five c.docx
Follow-Up Post Peer ResponsePlease write a minimum of five c.docxkeugene1
 
Followership and LeadershipThis week, you are focusing on the im.docx
Followership and LeadershipThis week, you are focusing on the im.docxFollowership and LeadershipThis week, you are focusing on the im.docx
Followership and LeadershipThis week, you are focusing on the im.docxkeugene1
 
Follow-Up Post InstructionsRespond to at least one peer and th.docx
Follow-Up Post InstructionsRespond to at least one peer and th.docxFollow-Up Post InstructionsRespond to at least one peer and th.docx
Follow-Up Post InstructionsRespond to at least one peer and th.docxkeugene1
 
Follow-Up Post InstructionsRespond to at least one person. Furth.docx
Follow-Up Post InstructionsRespond to at least one person. Furth.docxFollow-Up Post InstructionsRespond to at least one person. Furth.docx
Follow-Up Post InstructionsRespond to at least one person. Furth.docxkeugene1
 
Follow-Up Post (Response) InstructionsRespond to at least one pe.docx
Follow-Up Post (Response) InstructionsRespond to at least one pe.docxFollow-Up Post (Response) InstructionsRespond to at least one pe.docx
Follow-Up Post (Response) InstructionsRespond to at least one pe.docxkeugene1
 
Follow up discussion post  Please read and give your comment or addi.docx
Follow up discussion post  Please read and give your comment or addi.docxFollow up discussion post  Please read and give your comment or addi.docx
Follow up discussion post  Please read and give your comment or addi.docxkeugene1
 
Follow this link to access this weeks reading Social Justice Stan.docx
Follow this link to access this weeks reading Social Justice Stan.docxFollow this link to access this weeks reading Social Justice Stan.docx
Follow this link to access this weeks reading Social Justice Stan.docxkeugene1
 
follow these instructionsDescribe the vocal and instrumental pe.docx
follow these instructionsDescribe the vocal and instrumental pe.docxfollow these instructionsDescribe the vocal and instrumental pe.docx
follow these instructionsDescribe the vocal and instrumental pe.docxkeugene1
 
For almost 30 centuries—from its unification around 3100 B.C. to.docx
For almost 30 centuries—from its unification around 3100 B.C. to.docxFor almost 30 centuries—from its unification around 3100 B.C. to.docx
For almost 30 centuries—from its unification around 3100 B.C. to.docxkeugene1
 
For all their benign appearance, are sites like Facebook and Twitter.docx
For all their benign appearance, are sites like Facebook and Twitter.docxFor all their benign appearance, are sites like Facebook and Twitter.docx
For all their benign appearance, are sites like Facebook and Twitter.docxkeugene1
 
FOr Acadamic onlinetutorAssign 1 or 2 individuals of the group t.docx
FOr Acadamic onlinetutorAssign 1 or 2 individuals of the group t.docxFOr Acadamic onlinetutorAssign 1 or 2 individuals of the group t.docx
FOr Acadamic onlinetutorAssign 1 or 2 individuals of the group t.docxkeugene1
 
For all Assessments, the following general requirements hold.docx
For all Assessments, the following general requirements hold.docxFor all Assessments, the following general requirements hold.docx
For all Assessments, the following general requirements hold.docxkeugene1
 
for A-Z answers onlyoffshoring and its impact of labor and growt.docx
for A-Z answers onlyoffshoring and its impact of labor and growt.docxfor A-Z answers onlyoffshoring and its impact of labor and growt.docx
for A-Z answers onlyoffshoring and its impact of labor and growt.docxkeugene1
 
Footloose projectMost of the differences between the two versi.docx
Footloose projectMost of the differences between the two versi.docxFootloose projectMost of the differences between the two versi.docx
Footloose projectMost of the differences between the two versi.docxkeugene1
 
For 1-Hour Writer ONLY This author cited, Allport (1937) refers.docx
For 1-Hour Writer ONLY This author cited, Allport (1937) refers.docxFor 1-Hour Writer ONLY This author cited, Allport (1937) refers.docx
For 1-Hour Writer ONLY This author cited, Allport (1937) refers.docxkeugene1
 
Foodborne illness can have severe consequences.  In a minimum of 300.docx
Foodborne illness can have severe consequences.  In a minimum of 300.docxFoodborne illness can have severe consequences.  In a minimum of 300.docx
Foodborne illness can have severe consequences.  In a minimum of 300.docxkeugene1
 
Football- A starting point could be headlines Premier League susp.docx
Football- A starting point could be headlines Premier League susp.docxFootball- A starting point could be headlines Premier League susp.docx
Football- A starting point could be headlines Premier League susp.docxkeugene1
 
Foods deteriorate in quality due to a wide range of reactions .docx
Foods deteriorate in quality due to a wide range of reactions .docxFoods deteriorate in quality due to a wide range of reactions .docx
Foods deteriorate in quality due to a wide range of reactions .docxkeugene1
 
Food Truck to Ethiopia· Define what kind of food· Coffee is a .docx
Food Truck to Ethiopia· Define what kind of food· Coffee is a .docxFood Truck to Ethiopia· Define what kind of food· Coffee is a .docx
Food Truck to Ethiopia· Define what kind of food· Coffee is a .docxkeugene1
 

More from keugene1 (20)

Following all Discussion guidelines, in your own words and in de.docx
Following all Discussion guidelines, in your own words and in de.docxFollowing all Discussion guidelines, in your own words and in de.docx
Following all Discussion guidelines, in your own words and in de.docx
 
Follow-Up Post Peer ResponsePlease write a minimum of five c.docx
Follow-Up Post Peer ResponsePlease write a minimum of five c.docxFollow-Up Post Peer ResponsePlease write a minimum of five c.docx
Follow-Up Post Peer ResponsePlease write a minimum of five c.docx
 
Followership and LeadershipThis week, you are focusing on the im.docx
Followership and LeadershipThis week, you are focusing on the im.docxFollowership and LeadershipThis week, you are focusing on the im.docx
Followership and LeadershipThis week, you are focusing on the im.docx
 
Follow-Up Post InstructionsRespond to at least one peer and th.docx
Follow-Up Post InstructionsRespond to at least one peer and th.docxFollow-Up Post InstructionsRespond to at least one peer and th.docx
Follow-Up Post InstructionsRespond to at least one peer and th.docx
 
Follow-Up Post InstructionsRespond to at least one person. Furth.docx
Follow-Up Post InstructionsRespond to at least one person. Furth.docxFollow-Up Post InstructionsRespond to at least one person. Furth.docx
Follow-Up Post InstructionsRespond to at least one person. Furth.docx
 
Follow-Up Post (Response) InstructionsRespond to at least one pe.docx
Follow-Up Post (Response) InstructionsRespond to at least one pe.docxFollow-Up Post (Response) InstructionsRespond to at least one pe.docx
Follow-Up Post (Response) InstructionsRespond to at least one pe.docx
 
Follow up discussion post  Please read and give your comment or addi.docx
Follow up discussion post  Please read and give your comment or addi.docxFollow up discussion post  Please read and give your comment or addi.docx
Follow up discussion post  Please read and give your comment or addi.docx
 
Follow this link to access this weeks reading Social Justice Stan.docx
Follow this link to access this weeks reading Social Justice Stan.docxFollow this link to access this weeks reading Social Justice Stan.docx
Follow this link to access this weeks reading Social Justice Stan.docx
 
follow these instructionsDescribe the vocal and instrumental pe.docx
follow these instructionsDescribe the vocal and instrumental pe.docxfollow these instructionsDescribe the vocal and instrumental pe.docx
follow these instructionsDescribe the vocal and instrumental pe.docx
 
For almost 30 centuries—from its unification around 3100 B.C. to.docx
For almost 30 centuries—from its unification around 3100 B.C. to.docxFor almost 30 centuries—from its unification around 3100 B.C. to.docx
For almost 30 centuries—from its unification around 3100 B.C. to.docx
 
For all their benign appearance, are sites like Facebook and Twitter.docx
For all their benign appearance, are sites like Facebook and Twitter.docxFor all their benign appearance, are sites like Facebook and Twitter.docx
For all their benign appearance, are sites like Facebook and Twitter.docx
 
FOr Acadamic onlinetutorAssign 1 or 2 individuals of the group t.docx
FOr Acadamic onlinetutorAssign 1 or 2 individuals of the group t.docxFOr Acadamic onlinetutorAssign 1 or 2 individuals of the group t.docx
FOr Acadamic onlinetutorAssign 1 or 2 individuals of the group t.docx
 
For all Assessments, the following general requirements hold.docx
For all Assessments, the following general requirements hold.docxFor all Assessments, the following general requirements hold.docx
For all Assessments, the following general requirements hold.docx
 
for A-Z answers onlyoffshoring and its impact of labor and growt.docx
for A-Z answers onlyoffshoring and its impact of labor and growt.docxfor A-Z answers onlyoffshoring and its impact of labor and growt.docx
for A-Z answers onlyoffshoring and its impact of labor and growt.docx
 
Footloose projectMost of the differences between the two versi.docx
Footloose projectMost of the differences between the two versi.docxFootloose projectMost of the differences between the two versi.docx
Footloose projectMost of the differences between the two versi.docx
 
For 1-Hour Writer ONLY This author cited, Allport (1937) refers.docx
For 1-Hour Writer ONLY This author cited, Allport (1937) refers.docxFor 1-Hour Writer ONLY This author cited, Allport (1937) refers.docx
For 1-Hour Writer ONLY This author cited, Allport (1937) refers.docx
 
Foodborne illness can have severe consequences.  In a minimum of 300.docx
Foodborne illness can have severe consequences.  In a minimum of 300.docxFoodborne illness can have severe consequences.  In a minimum of 300.docx
Foodborne illness can have severe consequences.  In a minimum of 300.docx
 
Football- A starting point could be headlines Premier League susp.docx
Football- A starting point could be headlines Premier League susp.docxFootball- A starting point could be headlines Premier League susp.docx
Football- A starting point could be headlines Premier League susp.docx
 
Foods deteriorate in quality due to a wide range of reactions .docx
Foods deteriorate in quality due to a wide range of reactions .docxFoods deteriorate in quality due to a wide range of reactions .docx
Foods deteriorate in quality due to a wide range of reactions .docx
 
Food Truck to Ethiopia· Define what kind of food· Coffee is a .docx
Food Truck to Ethiopia· Define what kind of food· Coffee is a .docxFood Truck to Ethiopia· Define what kind of food· Coffee is a .docx
Food Truck to Ethiopia· Define what kind of food· Coffee is a .docx
 

Recently uploaded

Measures of Central Tendency: Mean, Median and Mode
Measures of Central Tendency: Mean, Median and ModeMeasures of Central Tendency: Mean, Median and Mode
Measures of Central Tendency: Mean, Median and ModeThiyagu K
 
microwave assisted reaction. General introduction
microwave assisted reaction. General introductionmicrowave assisted reaction. General introduction
microwave assisted reaction. General introductionMaksud Ahmed
 
Contemporary philippine arts from the regions_PPT_Module_12 [Autosaved] (1).pptx
Contemporary philippine arts from the regions_PPT_Module_12 [Autosaved] (1).pptxContemporary philippine arts from the regions_PPT_Module_12 [Autosaved] (1).pptx
Contemporary philippine arts from the regions_PPT_Module_12 [Autosaved] (1).pptxRoyAbrique
 
A Critique of the Proposed National Education Policy Reform
A Critique of the Proposed National Education Policy ReformA Critique of the Proposed National Education Policy Reform
A Critique of the Proposed National Education Policy ReformChameera Dedduwage
 
URLs and Routing in the Odoo 17 Website App
URLs and Routing in the Odoo 17 Website AppURLs and Routing in the Odoo 17 Website App
URLs and Routing in the Odoo 17 Website AppCeline George
 
Separation of Lanthanides/ Lanthanides and Actinides
Separation of Lanthanides/ Lanthanides and ActinidesSeparation of Lanthanides/ Lanthanides and Actinides
Separation of Lanthanides/ Lanthanides and ActinidesFatimaKhan178732
 
How to Make a Pirate ship Primary Education.pptx
How to Make a Pirate ship Primary Education.pptxHow to Make a Pirate ship Primary Education.pptx
How to Make a Pirate ship Primary Education.pptxmanuelaromero2013
 
Grant Readiness 101 TechSoup and Remy Consulting
Grant Readiness 101 TechSoup and Remy ConsultingGrant Readiness 101 TechSoup and Remy Consulting
Grant Readiness 101 TechSoup and Remy ConsultingTechSoup
 
Arihant handbook biology for class 11 .pdf
Arihant handbook biology for class 11 .pdfArihant handbook biology for class 11 .pdf
Arihant handbook biology for class 11 .pdfchloefrazer622
 
BASLIQ CURRENT LOOKBOOK LOOKBOOK(1) (1).pdf
BASLIQ CURRENT LOOKBOOK  LOOKBOOK(1) (1).pdfBASLIQ CURRENT LOOKBOOK  LOOKBOOK(1) (1).pdf
BASLIQ CURRENT LOOKBOOK LOOKBOOK(1) (1).pdfSoniaTolstoy
 
The Most Excellent Way | 1 Corinthians 13
The Most Excellent Way | 1 Corinthians 13The Most Excellent Way | 1 Corinthians 13
The Most Excellent Way | 1 Corinthians 13Steve Thomason
 
MENTAL STATUS EXAMINATION format.docx
MENTAL     STATUS EXAMINATION format.docxMENTAL     STATUS EXAMINATION format.docx
MENTAL STATUS EXAMINATION format.docxPoojaSen20
 
mini mental status format.docx
mini    mental       status     format.docxmini    mental       status     format.docx
mini mental status format.docxPoojaSen20
 
SOCIAL AND HISTORICAL CONTEXT - LFTVD.pptx
SOCIAL AND HISTORICAL CONTEXT - LFTVD.pptxSOCIAL AND HISTORICAL CONTEXT - LFTVD.pptx
SOCIAL AND HISTORICAL CONTEXT - LFTVD.pptxiammrhaywood
 
Organic Name Reactions for the students and aspirants of Chemistry12th.pptx
Organic Name Reactions  for the students and aspirants of Chemistry12th.pptxOrganic Name Reactions  for the students and aspirants of Chemistry12th.pptx
Organic Name Reactions for the students and aspirants of Chemistry12th.pptxVS Mahajan Coaching Centre
 
Kisan Call Centre - To harness potential of ICT in Agriculture by answer farm...
Kisan Call Centre - To harness potential of ICT in Agriculture by answer farm...Kisan Call Centre - To harness potential of ICT in Agriculture by answer farm...
Kisan Call Centre - To harness potential of ICT in Agriculture by answer farm...Krashi Coaching
 
Solving Puzzles Benefits Everyone (English).pptx
Solving Puzzles Benefits Everyone (English).pptxSolving Puzzles Benefits Everyone (English).pptx
Solving Puzzles Benefits Everyone (English).pptxOH TEIK BIN
 
Alper Gobel In Media Res Media Component
Alper Gobel In Media Res Media ComponentAlper Gobel In Media Res Media Component
Alper Gobel In Media Res Media ComponentInMediaRes1
 

Recently uploaded (20)

Model Call Girl in Tilak Nagar Delhi reach out to us at 🔝9953056974🔝
Model Call Girl in Tilak Nagar Delhi reach out to us at 🔝9953056974🔝Model Call Girl in Tilak Nagar Delhi reach out to us at 🔝9953056974🔝
Model Call Girl in Tilak Nagar Delhi reach out to us at 🔝9953056974🔝
 
Measures of Central Tendency: Mean, Median and Mode
Measures of Central Tendency: Mean, Median and ModeMeasures of Central Tendency: Mean, Median and Mode
Measures of Central Tendency: Mean, Median and Mode
 
microwave assisted reaction. General introduction
microwave assisted reaction. General introductionmicrowave assisted reaction. General introduction
microwave assisted reaction. General introduction
 
Contemporary philippine arts from the regions_PPT_Module_12 [Autosaved] (1).pptx
Contemporary philippine arts from the regions_PPT_Module_12 [Autosaved] (1).pptxContemporary philippine arts from the regions_PPT_Module_12 [Autosaved] (1).pptx
Contemporary philippine arts from the regions_PPT_Module_12 [Autosaved] (1).pptx
 
A Critique of the Proposed National Education Policy Reform
A Critique of the Proposed National Education Policy ReformA Critique of the Proposed National Education Policy Reform
A Critique of the Proposed National Education Policy Reform
 
URLs and Routing in the Odoo 17 Website App
URLs and Routing in the Odoo 17 Website AppURLs and Routing in the Odoo 17 Website App
URLs and Routing in the Odoo 17 Website App
 
Separation of Lanthanides/ Lanthanides and Actinides
Separation of Lanthanides/ Lanthanides and ActinidesSeparation of Lanthanides/ Lanthanides and Actinides
Separation of Lanthanides/ Lanthanides and Actinides
 
How to Make a Pirate ship Primary Education.pptx
How to Make a Pirate ship Primary Education.pptxHow to Make a Pirate ship Primary Education.pptx
How to Make a Pirate ship Primary Education.pptx
 
Grant Readiness 101 TechSoup and Remy Consulting
Grant Readiness 101 TechSoup and Remy ConsultingGrant Readiness 101 TechSoup and Remy Consulting
Grant Readiness 101 TechSoup and Remy Consulting
 
Model Call Girl in Bikash Puri Delhi reach out to us at 🔝9953056974🔝
Model Call Girl in Bikash Puri  Delhi reach out to us at 🔝9953056974🔝Model Call Girl in Bikash Puri  Delhi reach out to us at 🔝9953056974🔝
Model Call Girl in Bikash Puri Delhi reach out to us at 🔝9953056974🔝
 
Arihant handbook biology for class 11 .pdf
Arihant handbook biology for class 11 .pdfArihant handbook biology for class 11 .pdf
Arihant handbook biology for class 11 .pdf
 
BASLIQ CURRENT LOOKBOOK LOOKBOOK(1) (1).pdf
BASLIQ CURRENT LOOKBOOK  LOOKBOOK(1) (1).pdfBASLIQ CURRENT LOOKBOOK  LOOKBOOK(1) (1).pdf
BASLIQ CURRENT LOOKBOOK LOOKBOOK(1) (1).pdf
 
The Most Excellent Way | 1 Corinthians 13
The Most Excellent Way | 1 Corinthians 13The Most Excellent Way | 1 Corinthians 13
The Most Excellent Way | 1 Corinthians 13
 
MENTAL STATUS EXAMINATION format.docx
MENTAL     STATUS EXAMINATION format.docxMENTAL     STATUS EXAMINATION format.docx
MENTAL STATUS EXAMINATION format.docx
 
mini mental status format.docx
mini    mental       status     format.docxmini    mental       status     format.docx
mini mental status format.docx
 
SOCIAL AND HISTORICAL CONTEXT - LFTVD.pptx
SOCIAL AND HISTORICAL CONTEXT - LFTVD.pptxSOCIAL AND HISTORICAL CONTEXT - LFTVD.pptx
SOCIAL AND HISTORICAL CONTEXT - LFTVD.pptx
 
Organic Name Reactions for the students and aspirants of Chemistry12th.pptx
Organic Name Reactions  for the students and aspirants of Chemistry12th.pptxOrganic Name Reactions  for the students and aspirants of Chemistry12th.pptx
Organic Name Reactions for the students and aspirants of Chemistry12th.pptx
 
Kisan Call Centre - To harness potential of ICT in Agriculture by answer farm...
Kisan Call Centre - To harness potential of ICT in Agriculture by answer farm...Kisan Call Centre - To harness potential of ICT in Agriculture by answer farm...
Kisan Call Centre - To harness potential of ICT in Agriculture by answer farm...
 
Solving Puzzles Benefits Everyone (English).pptx
Solving Puzzles Benefits Everyone (English).pptxSolving Puzzles Benefits Everyone (English).pptx
Solving Puzzles Benefits Everyone (English).pptx
 
Alper Gobel In Media Res Media Component
Alper Gobel In Media Res Media ComponentAlper Gobel In Media Res Media Component
Alper Gobel In Media Res Media Component
 

FMM 225 Key Concepts and FormulasBilled Cost· Billed cost = Li.docx

  • 1. FMM 225 Key Concepts and Formulas Billed Cost · Billed cost = List price minus trade discounts(s) · Billed cost = # Units purchased Book Inventory · Book inventory at retail = Physical inventory + Net retail purchases (Total merchandise handled) + Other stock additions Net sales Markdown differences Other deductions from stock · Book inventory at cost Opening retail book inventory (100% Cumulative markup % achieved on stock Purchases) Build/Percentage Change/Trend · Build/percentage change/trend = × 100 · Build/percentage change/trend = × 100 Cost (Markup Formulas) · Cost $ · Cost % = · Cost % · Cost % · Cost $ Cost of Goods Sold · Total cost of goods sold $ Billed cost $ + Inward freight charges $ + Workroom cost $ minus Cash discount $ · · Cost of goods sold $ Customer Returns and Allowances · Customer returns and allowances $ Total of all refunds or credits to the customer on individual items of merchandise $ Number of units actually returned · Customer returns and allowances % · Customer returns and allowances $ Gross sales $ Customer returns and allowances % and allowances $ Cumulative Markup % · Cumulative markup % 100 Department’s Net Sales
  • 2. · Department’s net sales % of total stores sales Gross Margin · Gross margin = Net sales · Gross margin $ = Gross margin % · Gross margin % = × 100 Gross Margin % · Gross margin % 100 · Gross margin % 100 · Gross margin % 100 Gross Sales · Gross sales Total of all prices charged to consumers of individual items Number of units actually sold Gross Sales $ Initial Markup % · Initial markup % · Initial markup % · Initial markup % Maintained Markup % · Maintained markup % 100 · Maintained markup % 100 · Maintained markup % Initial markup % Retail reduction % (100% Initial markup %) · Purchase balance Total planned Purchases to date (pieces, retail, cost, or markup %) Markdown · Markdown $ Original or present retail price $ New retail price $ · Markdown $ Percentage off Present retail price $ · Total markdown $ First total $ markdown Second total $ markdown · Planned Markdown $ N Markdown % · Markdown % · Markdown % · Markdown cancellation Higher retail $ Markdown price $ · New Markdown $ Gross markdown $ Markdown canellation$ Markup
  • 3. · Markup $ Retail $ Cost $ · Markup % on retail 100 or 100 · Markup % on retail 100 or 100 · Cumulative retail markup % on entire purchase · 100 or 100 Net Cost · Net cost $ = Billed cost $ Cash discount $ · Net cost $ = List price $ Trade discount(s) $ Cash discount $ Net Profit · Net profit = Net sales · Net operating profit = G · Net profit $ = Net profit $ · Net profit% = × 100 Net Sales · Net Sales $ = Gross sales $ Customer returns and allowances $ Operating Expenses · Operating expenses = D · Operating expenses $ = O · Operating expenses = × 100 Retail · Retail $ Cost $ Markup $ · Retail % Cost % Markup % · Retail $ or Retail Reduction % · Retail reduction % Sell Through Percentage · Sell through % · Shortage or overage · Shortage (or overage) $ Closing book inventory at retail $ Physical inventory count at retail $ · Shortage % · Planned dollar shortage Planned shortage percentage Planned net sales $ Weeks of Supply · Weeks of Supply
  • 4. FMM 225 Key Concepts and Formulas B illed C ost · Billed cost = List price minus trade discounts(s) · Billed cost = # Units purchased × Invoice cost Book I nventory · Book inventory at retail = Physical inventory + Net retail purchases (Total merchandise handled) + Other stock additions - Net sales - Markdown differences -
  • 5. Other deductions from stock · Book inventory at cost = Opening retail book inventory × (100% - Cumul ative markup % achieved on stock + Purchases) Build/Percentage Change/T rend · Build/percentage change/trend = This year sales - last
  • 6. year sales last year sales × 100 · Build/percentage change/trend = This year sales - last year sales planned sales × 100 Cost (Markup F ormulas)
  • 7. · Cost $ = Retail $ - Markup $ · Cost % = Cost $ Retail $ × 100 · Cost % = Retail % - Markup %
  • 8. · Cost % = 100% - Markup % · Cost $ = Retail $ × 100% - Markup % ) Cost of Goods Sold · Total cost of goods sold $ = Billed cost $ + Inward freight charges $ + Workroom cos
  • 9. t $ minus Cash discount $ · Cost of goods sold % = Cost of goods sold $ Net sales $ × 100
  • 10. · Cost of goods sold $ = Cost of goods % × Net sales $ Customer Returns and A llowances · Customer returns and allowances $ = Total of all refunds or credits to the customer on individual items of merchandise $ × Number of units actually returned ·
  • 11. Customer returns and allowances % = customer returns and allowances $ gross sales $ × 100 · Customer returns and allowances $ = Gross sale s $ × Customer returns and allowances % and allowances $ Cumulative M arkup %
  • 12. · Cumulative markup % = Cumulative markup $ Cumulative retail $ × 100 Department’s Net S ales FMM 225 Key Concepts and Formulas Billed Cost minus trade discounts(s) Book Inventory purchases (Total merchandise handled) + Other stock additions -Net sales - Markdown differences - Other deductions from stock (100% - Cumulative markup % achieved on stock + Purchases) Build/Percentage Change/Trend
  • 13. This year sales -last year sales last year sales × 100 This year sales -last year sales planned sales × 100 Cost (Markup Formulas) -Markup $ Cost $ Retail $ ×100 -Markup % -Markup % etail $×100% -Markup %) Cost of Goods Sold charges $ + Workroom cost $ minus Cash discount $ Cost of goods sold $ Net sales $ ×100 goods % ×Net sales $ Customer Returns and Allowances credits to the customer on individual items of merchandise $ × Number of units actually returned customer returns and allowances $ gross sales $ ×100 Customer returns and allowances % and allowances $
  • 14. Cumulative Markup % Cumulative markup $ Cumulative retail $ × 100 Department’s Net Sales Module Two: Merchandising for a Profit 1 Recognize the importance of profit calculations in merchandising decisions Identify the components of a profit and loss statement, including calculations of the following: Net sales Cost of goods sold Gross margin Expenses Net profit Objectives
  • 15. Complete a profit and loss statement Identify types of business expenses and their impact on profit Use profit calculations to: Make comparisons between departments and stores Detect trends Make changes in merchandising strategy to achieve an increase in profits Objectives (continued) Alteration and workroom costs Balance sheet Billed cost Build/percentage change/trend Cash discounts Closing inventory Contribution Controllable expenses Controllable margin Cost Cost of goods sold (COGS)/cost of merchandise sold
  • 16. Customer allowance or markdown Customer returns Customer returns and allowances Direct expenses Final profit and loss statement Key Terms Gross margin Gross sales Income statement Indirect expenses Inward freight Net loss Net operating profit Net profit Net sales Opening inventory Operating expenses Operating income Profit and loss statement Reductions Retail Sales volume Skeletal profit and loss statement Total cost of goods purchased Total cost of goods sold Total merchandise handled
  • 17. Key Terms Key Concept Formulas Cost of Goods Sold Total cost of goods sold $ Billed cost $ + Inward freight charges $ + Workroom cost $ - Cash discount $ Cost of goods sold $ Billed cost Billed cost = List price – trade discounts(s) Billed cost = # Units purchased Key Concept Formulas Customer Returns and Allowances Customer returns and allowances $ Total of all refunds or credits to the customer on individual items of merchandise $ Number of units actually returned Customer returns and allowances % Customer returns and allowances $ Gross sales $ Customer returns and allowances % and allowances $
  • 18. Key Concept Formulas Department’s Net Sales Department’s net sales % of total stores sales Gross sales Gross sales Total of all prices charged to consumers of individual items Number of units actually sold Gross sales $ Net Cost Net cost $= Billed cost $ Cash discount $ Net cost $= List price $ Trade discount(s) $ Cash discount $ Net Sales Net Sales $ = Gross sales $ Customer returns and allowances $ Key Concept Formulas
  • 19. Key Concept Formulas Build/Percentage Change/Trend Build/percentage change/trend = × 100 = × 100 Gross Margin Gross margin = Net sales Gross margin $ = Gross margin % Gross margin % = × 100 Key Concept Formulas Operating Expenses Operating expenses = D Operating expenses $ = O Operating expenses = × 100 Net Profit Net profit = Net sales Net operating profit = G
  • 20. Net profit $ = Net profit $ Net profit% = × 100 Use of Profit Calculations Exchange data and compare stores to determine relative strengths and weaknesses. Indicate the direction of the business and whether it is prosperous, struggling for survival, or bankrupt. Provide a statement for analysis so that knowledgeable changes in management or policy can be made. Improve the profit margin by using this analysis. Profit Components Retail store sells merchandise to consumers at a profit Buyer is responsible for creating the merchandise assortment Selecting merchandise is determined after planning and analysis of what sold in a previous time period Need to determine what, when, where, and how much to buy and
  • 21. what to pay for these purchases Cost: Amount the retailer/buyer pays for these purchases Retail: Price stores offer merchandise for sale to the consumer Defining the Basic Profit Factors Net Sales: How much merchandise has been sold in dollars Cost of Goods Sold (COGS): The amount paid for the goods sold Gross Margin (GM): Resulting amount when COGS is subtracted from net sales Operating Expenses: Expenses incurred in buying/selling process other than the cost of goods Net Profit: Resulting amount when expenses are subtracted from GM Defining the Basic Profit Factors Gross sales: The entire dollar amount received for goods sold during a given period before any reductions are taken. Can also be though of as the total sales based on the initial or regular retail price.
  • 22. Reductions: Customer returns: When merchandise is returned and the customer receives a refund. Customer allowance or markdown: Price reduction given to a customer. Net sales: Sales total after all reductions have been deducted from gross sales. Amount of sales collected from the sale of merchandise that actually remains sold. More significant sales figure. Defining the Basic Profit Factors Cost of Goods Sold (COGS): Cost of merchandise that has been sold during a given period Cost or purchase: Price that appears on the purchase order/invoice Inward freight: Amount a vendor charges for transporting merchandise to the retailer Alteration and workroom costs: Charge to a department to get merchandise ready for sale Cash discounts: Percentage or dollar amount deducted from the invoiced cost that was negotiated between the buyer and vendor Defining the Basic Profit Factors
  • 23. Gross Margin (GM): The buyer’s measure of profitability. To maximize GM, buyers need to: Drive sales Negotiate the best cost price Operating expenses: Direct: Specific to a given department and would end if department was discontinued Indirect: Store expenses that exist whether a department is added or discontinued Defining the Basic Profit Factors Gross Sales: Total initial dollars received for merchandise sold during a given period Concept: Gross sales $ = Total of all the initial prices charged × Number of units to consumers on individual items actually sold Problem: During the week (Sunday through Saturday), a toy department sold 30 dolls (Group A) priced at $15 each; 25 dolls (Group B) priced at $25 each; and 5 dolls (Group C) priced at $30 each.
  • 24. What were the gross sales for the dolls for that week? Sales Solution (Arithmetic): 30 dolls @ $15 each = $450 25 dolls @ $25 each = $625 5 dolls @ $30 each = $150 Total gross sales = $1,225 Sales
  • 25. Customers can receive the following from a retailer: Refund of the purchase price Reduction to the selling price These transactions result in a cancellation of the gross sale and inventory value. Reductions (markdowns) to the selling price are commonplace in retailing today. Customer Returns and Allowances
  • 26. Concept: Customer returns = Total of all refunds or credits × Number of units And allowances $ to the customer on individual actually returned items of merchandise $ Problem: On Saturday, the junior petite department refunded $98 for one leather jacket; $75 each for two wool skirts; and $55 each for two knit tops. Other returns for the week amounted to $400, and the weekly total of markdowns given was $1,687. What was the dollar amount of customer returns and allowances for Saturday? For the week? Customer Returns and Allowances