Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. accounting
  3. 5. for the fourth of july, ray (manager of tucker�

5. For the Fourth of July, Ray (manager of Tucker’s Grocery) decided to try to sell...

Free

80.2K

Verified Solution

Question

Accounting

5. For the Fourth of July, Ray (manager of Tucker’s Grocery)decided to try to sell some red, white and blue T-shirts with theBerryville logo and fireworks on them. Ray bought 100 of theseT-shirts at $3.00 apiece and decided to sell them for $5.00 each.The shirts weren’t as popular as Ray had expected. By July 5, Rayhad sold only 30 of the shirts. He decided to mark the shirts downto $4.00 apiece. By July 20, Ray sold 20 more shirts. He thenmarked the remainder of the shirts down to $3.00 each and sold therest by July 30.

Part 1 - Please calculate the initial margin, markdown dollars,markdown percent, maintain margin dollars, and maintain marginpercent for the T-shirts.

Part 2 – Based on the numbers found in Part 1, would yourecommend Ray make a similar purchase next year? If Ray does decideto purchase the t-shirts again next year, would you recommend anychanges to his pricing strategy? What and why?

Answer & Explanation Solved by verified expert
3.8 Ratings (595 Votes)

1.)
Initial Margin (5-3)*100
Margin Dollars $200.00
Margin Percentage 200/(5*100)
40.00%
Units Rate Amount
30 5 150
20 4 80
50 3 150
TOTAL 380
Markdown Dollars 550-380
120
Mark Down Percent 120/500
24.00%
Maintain Margin Dollars 380-300
80
Maintain Margin % 80/380
21.05%
2.)
Yes Ray should do a similar purchase next year as it yeilds him profit
Yes, ray should maintain a constant pricing stratergy, the sales price
should have less margin but it should be constant
The Price should be constant as it would yeild him more customer
Loyality.

THANK YOU
HOPING FOR A POSITIVE RESPONSE
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students

Finance
1.2K views

The current riskfree rate is 4% and the expected rate of return on the market portfolio is...

Chemistry
1.2K views

7. Given the standard reduction potential for the following two half-cell reactions (in the presence of...

Biology
1.2K views

18. Certain microbes associated with food can also be harmful. We refer to these as_______________________ _______________ 21....

Chemistry
1.2K views

A researcher was attempting to quantify the amount of dichlorodiphenyltrichloroethane (DDT) in spinach with gas chromatography using...

Biology
1.2K views

4 Below is the Fischer projection of D galactose Which is the proper Haworth projection...

Geometry
1.2K views

The width of a rectangle is 4 less than twice its length If the area...

Basic Math
1.2K views

A small jet can fly 1650 miles in 3 hours with a tailwind but only...

Accounting
1.2K views

The trial balance of Wildhorse Company at the end of its fiscal year, August 31,...

Accounting
1.2K views

ms excel please Mccabe Corporation uses the weighted average method in...

Accounting
1.2K views

Question 1 (1 point) Saved Who thought that the universe was composed of an indefinite,...

Accounting
1.2K views

Account Name Type of Account Debit or Cre Liability Credit

Finance
1.2K views

Harry has just started a business with $500,000 of assets, funded by $300,000 of personal...