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In: Accounting

A department has an initial markup of 64%. Planned sales for April are $10,000 and $12,000...

A department has an initial markup of 64%. Planned sales for April are $10,000 and $12,000 for May. The desired stock-to-sales ratio for April is 7.0 and 6.5 for May. Planned markdowns for April are $3,000, and $4,000 for May. Calculate the planned April purchases at retail and at cost.

I already know the answers just need to know how to get there.

Answers= $21,000 at retail, $7560 at cost

Solutions

Expert Solution

Planned Purchases at Retail (April) = Planned Sales + Planned Reduction + Planned end of moth stock – Planned beginning of moth stock

= 10,000 + 3,000 + 78,000 – 70,000 = 21,000

Planned Sales Stock to sales ratio Planned retail stock
April 10000 7 70000
May 12000 6.5 78000

Planned Purchase at Cost = Planned purchase at Retail (1 – Initial markup %)

                                                = 21,000 (1 – 64%)

                                                = $ 7,560

ekkarill92 answered 3 weeks ago
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