FMM 225 Module Four Basic Markdown Equations Guidelines and
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Rubric
Overview: The true value of spreadsheets is that the formulas automatically calculate your answers without the need to recalculate data every time an input
number changes (which can be daily when selling merchandise). That is, once you set up the spreadsheet formulas, you can use the spreadsheet again and again,
build a new tab, or simply save it as a new document.
Prompt: For this assignment you will use Excel to calculate a variety of markdown problems using formulas. Specifically, you must complete the following:
1. Review the pertinent formulas.
2. Read each problem carefully from the “Problems” tab in the Module Four Basic Markdown Equations Excel document.
3. Complete each problem using formulas.
Rubric
Guidelines for Submission: Submit the completed Excel document. You will need to have the correct formulas in the cells. Number-only responses will not be
accepted for full credit.
Critical Elements Proficient (100%) Needs Improvement (55%) Not Evident (0%) Value
Markdown: Short Sleeve
Denim Shirts
Calculation is correct and the work to
arrive at the answer is accurate
Calculation is partially correct Calculation is not accurate 8
Markdown: Sheet Sets
Calculations are correct and the work to
arrive at the answers is accurate
Calculations are partially correct Calculations are not accurate 14
Markdown: Table Calculations are correct and the work to
arrive at the answers is accurate
Calculations are partially correct Calculations are not accurate 14
Markdown Percentage: Suits Calculation is correct and the work to
arrive at the answer is accurate
Calculation is partially correct Calculation is not accurate 8
Markdown: Girls’
Department
Calculations are correct and the work to
arrive at the answers is accurate
Calculations are partially correct Calculations are not accurate 14
Activewear Bottoms Calculations are correct and the work to
arrive at the answers is accurate
Calculations are partially correct Calculations are not accurate 14
Men’s Ties Calculations are correct and the work to
arrive at the answers is accurate
Calculations are partially correct Calculations are not accurate 14
Permanent Markdown Calculations are correct and the work to
arrive at the answers is accurate
Calculations are partially correct Calculations are not accurate 14
Total 100%
RETAIL PRICING AND REPRICING OF MERCHANDISE (MARKDOWN)
A Basic Markdown Percentage Equations
1. Calculating Markdown % on Retail
Using the Retail Method of Inventory
Markdown %
$Markdown
retail
Markdown %
2. Calculating Markdown % on Cost
Markdown %
$ Markdown
cost
Markdown %
3. Calculating Markdown % when cost and retail are known
a. when individual cost and individual retail are known
individual retail
– individual cost
$ Markdown
Markdown %
b. when total purchase cost and total purchase retail are known
total retail
– total cost
$ Markdown on entire purchase
Markdown %
4. Calculating Markdown % on a group of items with varying costs or retail prices i.e. order writing
Item A
Item B
Item C
Item D
Total
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Markdown %
5. Calculating Markdown % with varying retail prices that have the same cost
Merchandise
portion A
portion B
portion C
total
Markdown% on entire purchase
6. Calculating Markdown % on merchandise with varying costs at the same retail price
Merchandise A
Merchandise B
Merchandise C
total
Markdown % on enitre purchase
B Basic $ Markdown Calculations Used in Buying Decisions
1. Finding Retail when Cost and Markdown % are Known
retail
cost
Markdown %
2. Finding Cost when Retail and Markdown % are known
cost
retail
Markdown %
cost
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$0.0
0
$0.00
$ cost $ retail $Markdown
$0.00 $0.00 $0.00
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no. pieces unit cost total cost unit retail total retail Markdown
same $0.00
same $0.00
same $0.00
0 same $0.00
no.pieces unit cost total cost unit retail total retail Markdown
$0.00 same
$0.00 same
$0.00 same
$0.00 same
0
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REPRICING OF MERCHANDISE MARKDOWN
1. The men’s shirts buyer for a department store is taking a
markdown on short sleeve denim shirts for Father’s Day. All
$89.00 shirts will be markdown to $59.99. Calculate the
markdown dollars for the shirts.
Regular Price –
Markdown
Price =
$89.00 $59.99
2. The bedding buyer is running a promotion on sheet sets for a
back-to-school sale. All twin-sized sheet sets will be promoted at
25% off. The sheet sets regularly retail at $75.00. What are the
markdown dollars and the new retail price for the sheet sets? Regular Price x % off =
$75.00 25.0%
3. Fill in the blanks for parts (a)–(d) in the following table: Regular Price –
Markdown
Price =
a. $40.00 $19.99
b. $149.00 $109.99
c. $299.00 $249.98
d. $74.99 $29.95
Planned and Actual Markdown
4. For November, a suit buyer took markdowns totaling $24,700.
During this month, the net sales for the department amounted to
$50,000. What was the markdown percentage for November?
MD $ Net Sales $
$24,700 $50,000
5. If the girls’ department’s actual spring season sales were
$69,000, and the actual markdown percentage was 29.5%,
calculate:
a. The actual markdown dollars for the fall season in the girls’ departmentNet Sales $
MD %
$69,000 29.5%
b. If the planned markdown dollars for fall in the girls’ department
was $19,000, is the buyer over or under the markdown plan?
Planned Actual
$19,000 $17,405
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Compounding of Markdown
6. The entire stock of $99.00 activewear bottoms will be
promoted during Thanksgiving weekend as a POS promotion at
40% off. There will be a coupon in the paper for an additional
10% off. If the customer uses the coupon, calculate:
a. The final selling price for the activewear. Regular Price x % off =
$99.00 40.0%
b. The actual markdown % to the customer.
Original Retail
Price
New Retail
Price
$99.00 $0.00
c.The markdown journalized by the retailer.
Original Retail
Price
New Retail
Price
$99.00 $0.00
Point-of-Sale (POS) Markdown
7. The men’s tie buyer planned a Father’s Day promotion on
ties. The POS price point promotion was $19.99. Here is what
sold during the promotion:
40 ties with an original retail of $35.00; 50 ties with an original
retail of $40.00. Calculate the following:
a. Total markdown in dollars for the promotion
Original Retail
Price
New Retail
Price
$35.00 $19.99
$40.00 $19.99
b. Total sales dollars generated for the promotion New Retail Price Units Sold
$19.99 40
$19.99 50
Total Sales $ =
c. Total markdown percentage for the tie promotion MD $ Retail Sales
$0.00 $0.00
8. Permanent Markdown
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8.The men’s sweater buyer bought V-neck linen sweaters to retail
at $49.99. The buyer purchased 560 sweaters. At the full price,
140 pieces sold. A permanent markdown was taken to $39.99
and 120 pieces sold. Another permanent markdown was taken to
$29.99 and 150 pieces were sold. Calculate the following:
First set up a Sell Down Chart:
Units OH Beginning 560
Units Sold at Regular Price $49.99 140
Units OH to Perm to $39.99
Units Sold at $39.99 120
Units OH to Perm to $29.99
Units Sold at $29.99 150
Units OH balance
a. Total markdown $ for this sweater sale Retail Price
New Retail
Price
$49.99 $39.99
$39.99 $29.99
b. Total sales generated for the sweater sale New Retail Price Units Sold
$49.99 140
$39.99 120
$29.99 150
Total Sales =
c. Total markdown % for the sweater sales MD $ Retail Sales
$0.00 $0.00
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MD $
MD $
New Retail
Price
MD $ x
Units Sold
= Total MD $ MD %
1,275
525
375
722
MD %
MD $
Under/Over
spent
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MD $
New Retail
Price x
Additional discount
%
Additional
discount $ Final selling price
10%
MD $
MD % to
customer
MD $
MD % to
journal
MD $ Units Sold Total MD $
40
50
Total MD $ =
Total Sales OR New Retail Price Units Sold
Total Sales
$19.99 90
MD %
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MD $ Units OH Total MD $
$10.00 0
$10.00 0
Total MD $=
Total Sales
MD %
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Correct formula and answer
One or more formula errors
Wrong formula or no formula
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