A dinnerware retailer plans retail operating expenses to be 38 percent of sales,a net profit margin of 5 percent of sales,and retail reductions to be 10 percent of sales.Its required initial markup needs to equal 48 percent.

Question

Quizplus · Accepted Answer

The initial markup percentage is calculated to cover operating expenses, desired profit, and retail reductions. Adding these percentages (38% + 5% + 10%) equals 53%, which is higher than the required initial markup of 48%. Therefore, the statement is true as the required initial markup should at least be 48% to cover these costs.

A Dinnerware Retailer Plans Retail Operating Expenses to Be 38