A retailer plans retail expenses for the following year to be 30 percent of net sales,desires a 5 percent (of net sales)profit margin,and assumes total reductions will be 8 percent of net sales.What is its required initial markup percentage?

Question

Quizplus · Accepted Answer

The required initial markup percentage is 39.8%. This is calculated by dividing the desired profit margin (5%) by the complement of the total reductions (1 - 0.08 = 0.92).

A Retailer Plans Retail Expenses for the Following Year to Be