Question

A buyer for a children’s department plans to purchase $60,000 (retail) worth of sweaters. She will operate with a 58% markup. Her first purchase is for 1200 winter coats costing $16.00 each that she plans to retail for $36 each. What percent markup must be obtained on the balance of winter costs in order to average a 58% markup.

Answer 1

26.47 % markup to be obtained for maintenance of 58% markup on balance of winter costs

Workings:

Total Purchase = $60,000

First purchase = 1200 coats * $16 each

=$19,200

Second Purchase = Total Purchase - First Purchase

= $60,000 -$19,200

=$40,800

Sales Revenue From First Purchase Unit = Selling Price Per Unit In First Purchase Unit X Number Of Sweaters

=1,200 unit * $36

=$43,200

Total Markup Required = 58% On Cost

=$60,000 * 58%

=$34,800

Total Sales Value = Total Purchase + Total Markup Required

= $60,000 + $34,800

=$94,800

Sales Revenue Required On Second Purchase = Total Sales Value - Sales Revenue From First Purchase Unit

=$94,800 - $43,200

=$51,600

Markup In Second Purchase = Sales Revenue Required On Second Purchase - Second Purchase

=$51,600 - $40,800

=$10,800

Mark Up Percentage In Second Purchase = Markup In Second Purchase/Second Purchase

=$10,800 / $40,800

=26.47%