RMG 200 Lecture 12: Chapter 12 – Price
Document Summary
Gross margin ($)= maintained markup + cash discounts alterations. Cash discounts are the $ offered by manufacturer to retailer because of early payment. Alternation is the workroom cost suffered by the retailer, e. g. , cost to put a table together and polish it up in a furniture store) A department"s maintained markup is 38 percent, reductions are , and net sales are ,000. Maintained markup is 39%, net sales are ,000, alterations are ,700, and cash discounts are 2%. Cost of a product is , markup is 50 percent. Peter bought a tie for and priced it to sell for . The gap is planning a new line of leather jean jackets for . The total cost of the jacket, including transportation to the stores, is . How many jackets the gap needs to sell in order to make a profit of ,000 profit. Seeks to determine the price that customers are willing to pay and that will maximize profits.