Practice final exam
The buyer for men's furnishings is planning a 16% reduction in sales for the department. If last year's sales were $1,420,500, what is this year's planned sales figure?
$1,193,220
A buyer had an inventory on March 1 of $25,000 and a planned EOM stock of $30,000. As of March 1, the buyer had merchandise on order of $12,500 at retail to be delivered during the month. Planned markdowns for the month were $1,900, and planned sales were $20,000. The planned initial markup was 48%. Find the buyer's OTB for the month at cost.
$7,488
Merchandise on an invoice dated August 18 has a total list price of $876.80 with discounts of 30% and 15%; terms are 3/10. How much should be remitted if paid on September 10?
$876.80
All merchandise planning starts with and is based on:
Planned sales
Markup is the difference between
dollar markup and dollar cost
The gift buyer placed the following order for stuffed toys. Merchandise has discounts of 20% and 10% from the list price. Calculate the billed cost with the trade discounts. Quantity Item List Price 4 1/4 dozen Small dog $ 8.00 each 2 1/2 dozen Large dog $15.00 each 3 2/3 dozen Fuzzy dog $12.50 each 1 1/6 dozen Frog $10.00 each
$1,114.56
A buyer purchased ties at $90 a dozen. What should be the retail price for each tie in order to achieve a 48% markup?
$14.42
A department had weekly sales of $25,000. Two full-time employees worked 40 hours each and six part-timers worked a total of 180 hours. If the store considers 40 hours full time, determine the sales per full-time equivalent.
$3,846.15
Find the retail price for a leather sofa that cost $1,800 and has a 51% markup.
$3673.47
Merchandise with a total price of $2,896 has discounts of 45% and 15% and is sold with a 3% cash discount. How much is saved when the cash discount is taken?
$40.62
The bakery department in a supermarket had sales last week of $15,349. If the department occupies 300 square feet of space, what were the department's sales per square foot for the week?
$5.16
The buyer in housewares reduced 29 copper kettles from $28.00 to $17.99 each for a special sale. Eleven of the kettles were sold. After the sale, the remaining kettles were priced at $22.00 each. Determine the markdown cancellation.
$72.18
An invoice for hosiery is dated August 22 with terms 1/10, FOB store. The total billed cost of merchandise is $876.90 and shipping charges are $18.60. If the invoice is paid on September 5, how much should be remitted?
$876.90
The shoe department had planned sales of $540,000 for a three-month period. Markdowns were planned at 18.5%. Determine the dollar markdowns.
$99,900
Determine planned purchases (a) at retail and (b) at cost for a month with the following planned figures: Sales $148,000 Markdowns 8,400 BOM Stock 310,500 EOM Stock 340,000 Markup 48%
(a) $185,900, (b) $96,668
A buyer reduced 38 candlewick pillows from $20 to $12 for a special three-day sale. During the sale, 27 of the pillows were sold, and the remaining pillows were marked up to the original price of $20. Calculate (a) the markdown cancellation and (b) the net $ markdown.
(a) $88, (b) $216
Determine (a) the $ net markdown and (b) the net markdown % from the following figures: Gross Sales$450,000Customer Returns$10,000Total Markdowns$124,800Markdown Cancellation$32,400
(a) $92,400, (b) $21%
Calculate GMROI from the following data: Sales $1,346,700 Beginning inventory at cost $ 485,900 Closing inventory at cost $ 462,360 Gross margin 42%
1.19
Calculate GMROI from the following data: net sales, $434,000; beginning inventory at cost, $94,000; closing inventory at cost, $89,000; and gross margin, 35%.
1.66
Find the GMROI given net sales of $420,000, gross margin of 39%, and average inventory at cost of $98,000.
1.67
Net sales for the junior department in March were $128,480. Book inventory at the end of the month showed $427,831 should be on hand. Physical inventory showed $497,997. Determine shortage or overage percent (specify which).
1.69% overage
How many merchandise plans does a store or department typically develop for a year?
2
A chain store had sales last year of $98 million. This year's sales were planned for a 6% increase. If this year's actual sales were $102 million, what was the percent increase?
3.92%
During June, a buyer took markdowns totaling $102,000. Net sales for June were $300,000. Determine the markdown percent for June.
34%
Calculate GMROI for a six-month season from the following data: Gross margin $395,842 Inventory at Cost: BOM stock August 86,400 BOM stock September 91,200 BOM stock October 94,000 BOM stock November 105,000 BOM stock December 103,000 BOM stock January 83,000 EOM stock January 79,000
4.32
Determine the planned percent increase if last year's sales were $460,000, and this year's sales are planned at $480,000.
4.35%
Determine the initial markup percent for a sporting goods store that has the following planned figures for a three-month period: Net Sales $425,000 Profi t4.1%Expenses 0.0% Employee discounts $4,000 Cash discounts $7,000Alteration costs 3.5%Shortages $3,825 Markdowns6.4%
40.83%
The store owner purchased a special garment for a customer. The cost price was $85.50, and the retail was $156.88. What was the markup percent?
45.5%
A buyer intends to buy lamps with a retail value of $8,000. He has already purchased 80 lamps at $35 each which will retail for $78 each. What markup should he obtain on the remaining lamps in order to achieve a 54% markup goal?
50%
To determine average stock precisely, stock counts may be taken on a weekly basis. For a year how many weekly figures would be used in determining the average stock?
53
The buyer for Jayne's Fine Interiors received a report showing an opening inventory for August of $950,000 at cost with a markup of 52%. During the month, merchandise costing $400,000 with a 58% markup was received into the department. Find the cumulative markup percent for August.
53.95%
The linens department received 175 designer comforters that retailed for $199. The department sold 52 the first week, 31 the second week, 19 the third week, and 8 the fourth week. Calculate the sell-through percent for the month. Round your answer to the nearest hundredth.
62.86%
A buyer's sales for October are estimated at $15,000. Her stock on October 1 is $38,000, and she has $11,000 stock at retail on order for the month. Markdowns are planned at 8% for the month, and the planned EOM stock is $40,000. The planned initial markup is 47%. Determine the OTB at retail on October 1.
7,200
What is the last day for taking the cash discount on an invoice dated June 28 with terms of 8/10 EOM?
August 10
A good measure of inventory profitability is GMROI. It is calculated by dividing the dollar gross margin by:
Average inventory at cost
The cost after quantity and/or trade discounts have been deducted is called the
Billed cost
The two principal tools of financial planning used by the buyer are:
Dollar merchandise plan and the open-to-buy
A measure of inventory profitability that relates a store's gross margin to the cost of the inventory needed to generate the profit is referred to as:
Gross Margin Return on Inventory (GMROI)
A loss will occur if expenses exceed:
Gross margin
Net sales minus cost of merchandise sold equal
Gross margin
Department and specialty stores evaluate individual departments on which type of margin results?
Gross margin, Contribution, Profit
What is the first step in developing an assortment plan?
Identify the selection factors that are most important to the customer.
If the buyer does not have sufficient OTB to make a desired purchase, which of the following actions would increase the buyer's OTB?
Increase planned markdowns Return merchandise to vendor Cancel outstanding orders
Which of the following statements is true of open-to-buy?
It cannot be determined unless the amount of stock on hand is know.
What is the discount date for an invoice dated July 6 with terms 3/10, n/30?
July 16
This is the most common type of price change.
Markdown
An upward price change on previously reduced merchandise is called:
Markdown cancellation
The difference between the total dollar markdown and total markdown cancellation is the:
Net markdown
The relationships among these three factors, which are shown in skeletal statements, are used to determine a profit or loss:
Net sales, expenses, and cost of merchandise sold
Why is it important to hold back some of the OTB dollars?
New lines or items may appear that the buyer will want to purchase. Reorders may need to be placed to fill in staple stock or replace fast-selling items. Special promotions from vendors may become available.
Planned sales + planned markdowns + planned ending stock - stock on hand - orders placed for delivery during the period, determines the:
Open-to-buy
Why do retailers express markup as a percent rather than as a dollar figure?
Percents facilitate analysis and comparison of merchandising and operating results.
Use a skeletal statement format to calculate profit/loss percent, given: Gross sales $583,260 Customer returns & allowances $32,662 Gross margin 51.8% Expenses $277,049 Hint: Remember, gross margin percent is based on net sales.
Profit 1.48%
Calculate profit/loss percent, given: Net sales $1,230,600 Cost of merchandise sold $609,147 Expenses $553,770
Profit 5.50%
Which one of the following type of stores would be most likely to base markup on cost rather than on retail?
Small independently owned mom-and-pop store
If only the term "net 30" appears on an invoice, what does this mean?
The bill must be paid within 30 days, and no discount is permitted for early payment.
If transportation charges are "FOB store," who is ultimately responsible for the transportation charges?
The seller
Which of the following is NOT a purpose of markdowns?
To determine future markups
This type of discount is a percent that may be deducted from a list price set by the vendor. The amount of the discount varies according to the customer. For example, a wholesaler may receive a higher discount than a retailer.
Trade discount
The cost complement is the difference between the retail percent (100%) and the _____%.
markup percent
