Question

In: Finance

You want to raise your markup percentage but your can't raise prices and your vendors won't give you a lower cost. What should you do?

You have the following purchases by item

Item                                  Total Retail             Total Cost

T-Shirts                        956                          398

Caps                              456               219

Scarfs                     195                  100

Flags                       270                 200

Mugs                             211                     100

You want to raise your markup percentage but your can't raise prices and your vendors won't give you a lower cost. What should you do?



Sell more T-shirts to change the mix



Sell more flags to change the mix



There is nothing you can do if you can't raise prices or get a lower cost from your vendors.



Run more 50% off sales



None of the above

Solutions

Expert Solution

Profit % in sales of T-shirts =(956-398)/398 =140%
Profit % in sales of Caps =(456-219)/219 =108%
Profit % in sales of Scarfs =(195-100)/100=95%
​​​​​​Profit % in sales of Flags =(270-200)/200 =35%
​​​​​​Profit % in sales of Mugs =(211-100)/100 =111%

Option a is correct option. Sell more T-shirts to change the mix This is because profit percentage of T-shorts is highest.
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