Merchandising Mathematics for Retailing 5th Edition by Cynthia Easterling ,Ellen Flottman,Marian Jernigan ,Beth Wuest

Exercise 1

Calculating Initial Markup and Average Markup
Tammy Robinson, Ph.D. and Farrell Doss, Ph.D. Radford University
Christy Williams is a recent graduate from Mason College, where she majored in Fashion Merchandising. After several interviews, she was pleased to accept a job as Assistant Store Manager at Kayla's Specialty Store, a small specialty store that sells women's apparel and accessories. She assists the owner, Mrs. Allen, with purchasing and pricing merchandise.
On the fall buying trip, Mrs. Allen purchased two items from one vendor. They included 2 dozen sweaters for the fall season with a cost price of $32 and 3 dozen coordinating blouses with a cost price of $24. Although Mrs. Allen felt strongly about these purchases, she did not find a selection of skirts and pants from this vendor to meet her customers' needs.
During the same buying trip, Mrs. Allen discovered a new vendor and was able to secure a great deal on some skirts and pants that can be grouped with the sweaters and blouses on the sales floor. Twelve skirts were purchased for a cost of $20 each. They will retail for $42 each. Also purchased were 18 pairs of pants for $18 each, which will retail for $38 each. Mrs. Allen has asked Christy to calculate the average markup of this group to ensure the store's planned markup of 51.6% will be met.
After reviewing the store's figures, Christy produced the following numbers: During the last quarter, expenses have averaged 35%, markdowns have averaged 12%, and profit has averaged 4.5%. The store's planned sales are $325,000. Using this information, Christy must determine the initial retail price of the new fall sweaters and blouses.
Using the information provided by Christy, determine the initial markup percent and the initial retail price for the new fall sweaters and blouses.