| Module Two: Merchandising for a Profit |
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| Correct formula and answer |
| Operating Income (Gross Sales and Net Sales) |
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| Wrong formula or no formula |
| 1. Return Percentages: Customer returns and allowances for Department #620 came to $5,500. Gross sales in the department were $100,000. What percentage of merchandise sold was returned? |
| Customer returns and allowances |
$5,500 |
| Gross sales |
$100,000 |
| Return Percentage |
| 2. Net Sales $: If gross sales for Store A are $1,150,000 and reductions are $345,000, what are the net sales? |
| Gross sales $ |
$1,150,000 |
| Reductions $ |
$345,000 |
| Net sales $ |
| 3. Men's Store: If gross sales for Main Street Men's Store were $248,000 and the reduction % was 20%, calculate the following: |
| a. The dollar amount of reductions |
| b. The net sales |
| Gross Sales |
$248,000 |
| Reduction % |
20% |
| Dollar amount of reductions |
| Net sales men's store |
| 4. Loungewear Department: After Mother's Day this year, the loungewear department had customer returns of 8.5%. The department's gross sales amounted to $835,380. As the buyer reviewed last year’s figures for the same period, the customer returns were 10.5%, with gross sales of $726,149. |
| Compute the department’s performance in dollars and percentages for this year and last year, with regard to gross sales, customer returns, and net sales. |
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| LY |
% |
TY |
% |
| Loungeware net sales |
| 89.5% |
| 91.50% |
| Customer returns |
| 10.5% |
| 8.5% |
| Loungewear gross sales |
$726,149.00 |
100.0% |
$835,380.00 |
100.00% |
| 5.Towel Department Net Sales: The towel department represents 2% of total store sales, which are $3,500,000. What are the net sales planned for the towel department? |
| Total store sales |
$3,500,000 |
| % to total |
2.0% |
| Towel department net sales |
| 6. Shoes/Sneakers Net Sales: Casual sneaker sales represent 4.5% and athletic shoe sales represent 8.2% of total store sales. If total store sales are $960,000, what are the dollar sales for each department? |
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| Casual Sneakers |
Athletic Shoes |
| Total store sales |
$960,000 |
$960,000 |
| % to total |
4.5% |
8.2% |
| Sneakers/shoes net sales |
| Cost of Goods Sold Practice Problems |
| 7.Total Billed Cost: The girls’ buyer placed an order for the following merchandise:
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| 150 sweaters with a billed cost of $7.75 each |
| 175 knit tops with a billed cost of $4.50 each |
| 250 leggings with a billed cost of $5.25 each |
| Calculate the total billed cost for this order. |
|
| # Units |
Billed cost |
Total costs |
| Sweaters |
150 |
$7.75 |
| Knit Tops |
175 |
$4.50 |
| Leggings |
250 |
$5.25 |
| Total |
| 8.Total Cost of Merchandise: A gift shop has workroom costs of $575. The billed cost of merchandise sold amounted to $59,000, with cash discounts earned of $1,180 and freight charges of $650. Find the total cost of the merchandise. |
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| Billed cost |
Shipping |
Workroom costs |
Discounts |
Total cost |
| Total Cost of Merchandise |
$59,000 |
$650 |
$575 |
$1,180 |
| Gross Margin Practice Problems |
| 9. Gross Margin: Calculate the gross margin in dollars and percentage for the home department if: |
| Net sales = $149,000 |
| Billed cost of merchandise = $84,250 |
| Cost discount=6.5% |
| Shipping charges = $840 |
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| Billed Cost |
Cost Discount % |
Cost Discount $ |
Shipping |
COGS |
| COGS |
$84,250 |
6.50% |
| $840 |
| Net sales |
$149,000 |
| COGS |
$0 |
| Gross Margin Total Cost and Percentage |
| Operating Expense Practice Problems |
| 10. Total Expenses and Comparison of Sales: Analyze the following information: |
|
| TY |
Plan |
LY |
| Net sales |
$485,000 |
$520,000 |
$450,000 |
| Advertising costs |
$82,000 |
$85,000 |
$86,000 |
| Salaries |
$94,000 |
$90,000 |
$91,000 |
| Find the following: |
| a. What are the total expenses in $ and % for TY, Plan, and LY? |
TY |
Plan |
LY |
| Advertising costs |
$82,000 |
$85,000 |
$86,000 |
| Salaries |
$94,000 |
$90,000 |
$91,000 |
| Total expenses |
| Total net sales |
$485,000 |
$520,000 |
$450,000 |
| Expense % |
| b. What is the comparison (build) of sales for TY versus Plan and TY versus LY? |
TY |
Plan |
LY |
| Net sales |
$485,000 |
$520,000 |
$450,000 |
| Build TY vs. Plan |
| Build TY vs. LY |
| Skeletal Profit and Loss Statements |
| Net sales $1,390,000 |
| Gross margin $574,700 |
| Profit $105,000 |
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| $ |
% |
| Net Sales Problem One |
$1,390,000 |
100.0% |
| -COGS |
| =GM |
$574,700 |
| -Expenses |
| =Profit/Loss |
$105,000 |
| 11.Skeletal Profit and Loss Statement: Set up skeletal profit and loss statement in both dollars and percentage given the information. |
| Gross margin $535,000 |
| Gross margin 25% |
| Expenses $625,000 |
| Net Sales Problem Two |
$2,140,000 |
100.0% |
| -COGS |
| =GM |
$535,000 |
25.0% |
| -Expenses |
$625,000 |
| =Profit/Loss |
Fullborehemi
ModuleTwoMerchandisingforaProfit.xlsx
