UNIT E SELLING FASHION 5.03 Perform various mathematical calculations in retail sales.

Calculate Basic Math Convert fractions to percents. –Divide numerator by the denominator. –Example: ½ = 1 ÷ 2 =.50 = 50%

Calculate Basic Math (cont.) Convert percents to decimals. –Move the decimal point two places to the left. –Example: 60% =.60

Calculate Basic Math Convert decimals to percents. –Move the decimal point two places to the right. –Example:.63 = 63%

Cash Drawer Open: Verify the opening change fund Change fund: Coins and currency designated for use in day’s activity. Till: The cash drawer of a cash register. Close : Balance the cash drawer Change fund + days sales totals Differences are recorded as cash short or cash over

Sales Transaction Terms Extension: –Multiplying the number of units by the price per unit. –Example: 4 Shirts. $20 per shirt. –4 X $20 = $80.00 Subtotal: –Total of all items –Add the retail price for all items –Does Not include sales tax

The Sales Transaction Sales tax: –Percentage of total sale paid to the gov’t Formulas –Subtotal X Sales tax rate = Sales tax –($55 X 8.25% = $4.54) –Subtotal + Total sales tax = Amount due –($55 + $4.54 = $59.54)

Retail Sales Terms Cost: (C) Amount a retailer pays for merchandise Retail Price: (RP) Amount customer pays for merchandise Profit: Retail Price minus merchandise cost Gross profit: Total sales minus cost of merchandise Net profit: Gross profit minus total operating expenses.

Markup Markup: –Amount added to the cost of an item –RP=C+MU ($70 = $45 + $25) –C=RP-MU ($45 = $70 - $25) –MU=RP-C ($25 = $70 - $45) Keystone Markup: –Markup equal to the cost of the item –Double the cost ($45 + $45 = $90)

Markup % Calculations Based on retail price Used by most department and fashion specialty stores Markup (MU) ÷ Retail Price (RP) = Markup % (MU%) $25 ÷ $70 =.357 or 36% Markup percent based on cost Used by some small businesses Markup (MU) ÷ Cost (C) = Markup % (MU%) $25 ÷ $45 =.556 or 56%

Markdown Markdown: –Reducing the retail price of an item –The most common type of retail price change –stimulate sales –dispose of slow moving/discontinued items –meet competitors’ prices –increase customer traffic. –Buying errors –Pricing errors –Special sales –Reduction of stock

Calculate Markdown Markdown = Retail Price X Markdown percent MD = RP X MD% Example: $58.50=$ X 30%

Calculate Markdown The “New” Retail Price (after markdown) New RP = Original RP – MD Example: $195 - $58.50 = $136.50

Employee Discount –Reduction in retail price given to employee –Averages from 10% to 30%