Question

The handbag buyer bought 960 printed handbags to retail at $60.00. At the regular retail price, only 60 handbags were sold. The buyer took a 25% off POS markdown and 150 handbags sold. The buyer took another POS markdown to $34.99 and 200 handbags sold. Calculate the following:

1. Markdown $ for this sale.

2. Sales $ generated for the sale.

3. Markdown % for this sale.

4. If you planned markdown dollars were $8,000, does the buyer have more or less markdowns to spend and by how much in dollars?

Answer 1

The Markdown % is calculated as the dollar markdown divided by the NET retail sales price (times 100).
Original selling price	60
Quantity	960
First 60 at retail price
150 sold at 25% POS markdown
let actual selling price after 25% markdown is P
so, P = 60 - 0.25P
(0.25P/(60-0.25P)*100	=25
0.25P	=.25(60-.25P)
0.25P + 0.0625P	=15
P	=15/(.25+.0625)
P	= 48
So, Price after 25% POS markdown is 48, and markdown is 60-48 = 12
With next POS markdown retail price is 34.99, making total markdown = 60-34.99 = 25.01
Markdown % for second sale	=25.01/34.99*100
	71.47756502
	or, 71.48%
Total markdown in dollors
	Dollor markdown	sales unit	Total markdown
First sale	12	150	1800
Second sale	25.01	200	5002
Total Mark down	(A)		6802
Planned markdown dollros	(B)		8000
More markdown to spend	(B-A)		1198