FM 224 Lecture Notes - Lecture 1: Gross Margin

• School: FIT
• Department: Fashion Business Management
• Course: FM 224
• Professor: Janewerner

Document Summary

Commission: a method of compensation in which a salesperson is paid a percentage of their sales. Contribution or controllable margin: the amount remaining after direct expenses are subtracted from gross margin. Direct expenses: expenses that specifically relate to the operation of selling department and that would be eliminated if that department were eliminated. Full time employee: a worker who is employed year-round and works 35-40 hours a week. Full-time equivalent employees: the number of hours worked by part-time employees divided by the number of hours worked to be a full-time work week. Gross margin or gross profit: difference between net sales and total cost of merchandise sold. Gross margin return on investment (gmroi): a measure of inventory profitability that relates to gross margin to the cost of the inventory. Gross sales: total sales before customer returns and allowances are deducted. Indirect expenses: expenses that do not relate to specific selling departments. Loss: results when operating expenses exceed gross margin.