Question

Casual Fashions had markdowns of 18.5%, shortages of 1.5%, alteration charges of 3%, employee discounts of 5% and cash discounts of 6%.  The initial markup percent was 52%.  What was the maintained markup percent (MMU %)?

Answer 1

Answer:-

Initial Markup = (original retail price - cost) / original retail price

Maintained Markup = (Actual retail price - cost) / Actual retail price

If we assume Cost as 100%, Then

Original retail price = Cost + Initial Markup

= 100% + (100%*52%) =100 + 52 = 152%

Actual Retail price = Original retail price - markdowns -shortages - alteration charges - employee discounts - Cash discounts ( Assuming Cash discount is received from supplier )

= 152% - (- 18.5% -1.5% - 3% - 5% + 6% )

= 152% - 22%

= 130%

There Maintained markup percent = 130% - 100%(since cash discount is already considered) / 130%

= .23076

= 23%