Average MU Problems:
1. The jewelry buyer is planning a Mother’s Day promotion on bracelets. The buyer has purchased the following bracelets: 1200 silver charm bracelets at the cost of $5.00, 900 beaded bracelets at the cost of $4.50, and 900 colored stone bracelets at the cost of $6.30. The markup goal for the promotion is 65.0%. What is the retail price that the buyer can sell the bracelets for?
2. The shoe buyer plans to promote flip-flop sandals at $24.99. The buyer needs to purchase10,000 flip flops for the event. Six thousand (6000) flip-flop sandals have been purchased at the cost of $11.50. The planned markup for the event is 59.0%. What will be the average cost of the remaining sandals?
3. The towel buyer has a budget planned for June of $500,000 at retail and requires a 58% markup. The first purchase of towels is for 6,000 units with a cost of $11.00 and a retail of $24.00. What markup percentage does the buyer need on balance to achieve the planned markup percentage?
4. Avg. Cost
A buyer needs 120 hoodies to retail at $20 each and 40 crewnecks to retail at $15 each. The buyer needs to average a 45% markup. If the buyer pays $10 for each hoodie, how much can she pay for each crewneck?
Questions from Textbook [Pages 158-163]
· AVERAGE COST –> PRACTICE PROBLEMS# 23, 24, 25, 26, 27,
23. A buyer plans to purchase 7,200 pairs of socks for a pre-Christmas sale. The unit retail price is planned at $7.50, and the markup goal for the purchase is 59%. The buyer purchases 4,800 pairs at the Sock Company showroom, at cost of $3.15 each
(a) What is the maximum total cost the buyer can pay for the balance of the total purchase?
(b) What will be the average cost per pair for the socks (2,400 socks) yet to be purchased?
24. A separates buyer — who operates on a 61% markup — needs 300 skirts to retail at $79 each and 600 blouses to retail at $49 each. If this buyer pays $20.75 for each blouse, how much can be spent for each sort without deviating from the target market percentage?
25. A buyer who needs $10,000 worth of merchandise at retail for a housewares department has written orders for $2,875.50 at cost. The planned departmental markup percentage is 53.5%. How much (in dollars) is left to spend at cost?
26. A December promotion of 1,500 crystal bud vases to retail at 40$ each is planned. The buyer requires a 48.5% average markup and has made an initial purchase consisting of 1,200 units costing $23 each. What is the cost to be paid on each remaining unit? Comment of the buyer’s predicament” if you detect one.
27. A buyer for the exclusive Britique Shop purchased 100 cashmere pullover sweaters at 31$ each and priced them at $90 retail. Also planned is a purchase of 72 chunky knit wool sweaters to retail at $120each. Departmental goal markup is 67.5%. How much can be paid for each chunky wool sweater?
· AVERAGE RETAIL –> PRACTICE PROBLEMS# 28,29,30,31
28. An off-price buyer purchases closeouts of 400 pairs of men’s jeans, 280 pairs costing $24 each and 120 pairs costing $27 each. If a 54% markup is targeted, what would be the average unit retail price on the jeans?
29. A buyer purchased 120 bandeau swimsuits at $32 cost and placed a $79 retail on them. Sixty string bikinis are also purchased at $26 each. What would be the retail price on the bikinis if a 60% markup is desired on the combined purchase?
30. A men’s accessories buyer purchases 10,000 neckties from a manufacturer at the low cost price of $16 per tie. Noticing that the ties are of two types, 6,200 solids and 3,800 stripes, the buyer decides to attempt some creative merchandising. If each solid tie is retailed at $45, what minimum retail price should be placed on each striped tie if the average markup of 68% is desired?
Total cost of neckties = 10,000 x $16 = $160,000
Retail price = 10,000 / (100 – 68%)
= $160,000 / 0.32 = $500,000
Solid tie = 6,200 x $45 = $279,000
Total retail price of stripes = $500,000 – $279,000 = $221,000
Total of 3,800 stripes
Avg retail price of tie = Total retail price of stripes / total stripes
Retail price per striped tie = $221,000 / 3,800 = $58.16
31. An outwear buyer confirms an order reading as follows:
(a) 145 trench raincoats costing $39 each
(b) 75 anorak rain jackets costing $28 each.
If a retail price of $85 is placed on the trench coats, and a markup average of 55.5% is sought, what retail price must the anorak rain jackets carry?
· AVERAGE MU ON BALANCE–> PRACTICE PROBLEMS# 32, 33, 34, 35, 36, 37
32. A buyer plans to purchase jackets at a 58% markup with a retail value of $18,500. If the buyer acquires 100 jackets at $54.75 each and retails them at $125 each, what markup percentage must now be obtained on the balance of the purchases in order to achieve the desired markup percentage?
Markup = Retail value x Markup%
= $18,500 x 58% / 100 = $10,730
Markup on 100 jackets = Retail price for each 100 jacket – 100 jacket cost x 100
= 125 – 54.75 x 100 = $7,025
Remaining Retail value = Retail price – Retail price for each 100-jacket x 100
= $18,500 – (125 x100) = $6,000
Remaining markup needed = Markup – Markup made on 100 jackets
= $10,730 – 7,025 = $3,705
Required percentage markup = Remaining markup needed / remaing retail value of jacket needed to be purchased
= 3,705 / 6,000 = 61.75%
33. A buyer who needs $23,000 worth of goods at retail for May has a planned markup of 59.5%. May orders to date total $4,500 at cost and $9,800 at retail. What markup percentage must now be obtained on the balance of the purchases for May to achieve the planned markup percentage for the month?
34. The men’s outwear buyer, who needs a 51% average markup for a Columbus Day promotion, is planning to buy $9,500 worth of merchandise at a retail for October. To date, 100 motorcycle jackets costing $23.40 each have been purchased, with a plan to retail them at 48% markup. What markup percentage is needed on the balance of the purchase to attain the average markup percentage?
Total Markup = $9,500 x 51% = $4,845
Markup % = 100 x $23.40 x 48% = 1,123.20
Remaining markup = $4,845 – $1,123.20 = $3,721.80
Markup % = $3,721.80 / (9,500 – 2,340)
= $3,721.80 / 7,160 = 1.98%
35. A suit buyer who plans sales of $75,000 at retail during April has an average markup goal of 54%. An order is placed with the B&C Sportswear Company for April delivery in the amount of $5,975 at cost and $11,000 at retail . What markup percentage must be made on the balance of the April purchases to achieve the planned markup?
Planned retail sales of April = $75,000 x 54% / 100 = $40,500
= $75,000 – $40,500 = $34,500
Sales to B&C sportwear = $11,000 – $5,975 = $5,025
Goods available for sale = $34,500 – $5,975 = $28,525
Required balance profit = $40,500 – $5,025 = $35,475
Purchase of retail price = $35,475 + $28,525 = $64,000
Markup % = $35,475/ $64,000 x 100 = 55.43%
36. A housewares buyer plans a $15,000 promotion of decorative stepstools to retail at $25 each at a 48% markup. A local manufacturer supplies 500 stools for $14 each. What markup percentage must be obtained on the remainder of the planned purchase to reach the markup goal?
Quantity = 500 UR= $25 UC= $14
Local manufacturer supplies = 14 x 500 = 7,000
Total cost of manufacturing = 15,000 x 0.52 = $7,800
Total revenue = 25 x 500 = $12,500
Markup = 15,000 – 12,500 = 2,500
Retail generated = 7,800 – 7,000 = $800
Retail that’s left to generate = 2,500 – 800 = $1,700
Markup % = 1,700/ 2,500 = 68%