The major difference between an initial markup and a maintained markup is that the maintained markup reflects _____.
A)planned shortages
B)planned retail operating expenses
C)actual prices received and actual shortages
D)actual purchases

Question

Quizplus · Accepted Answer

An initial markup is the percentage difference between the cost of goods and the selling price that a retailer sets when the merchandise is first received. On the other hand, a maintained markup reflects the actual prices received and actual shortages, which means it is the percentage difference between the selling prices and the cost of goods actually sold. Therefore, the best choice is C, which correctly defines what a maintained markup reflects. A planned retail operating expense is not related to the calculation of markup, and actual purchases are used to calculate the cost of goods sold, not markup. Planned shortages are not related to either initial or maintained markup calculations.

The Major Difference Between an Initial Markup and a Maintained