3. You are the buyer for a large retail chain. You need to calculate your gross...

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3. You are the buyer for a large retail chain. You need to calculate your gross...

3. You are the buyer for a large retail chain. You need to calculate your gross margin. You have the following information available:

Purchases at retail $546,843

Purchases at cost 324,756

Markdowns 151,324

Employee discounts 33,456

Freight 4,521

Shortage 1,346

Cash discounts 5,678

Sales 359,818

Alterations 342

Senior citizen discount 899

What is the total gross margin?

4. Repeat exercise three; however, calculate the gross margin using percentages.

business accounting

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Answer 1

Answer #1

Ans 3.

Calculation of Gross Margin

Sales $359,818

Less: Purchase at Cost $ 324,756

Less: Marks down $ 151,324 $ 173,432

Less: Employee Discounts $ 33,456

Freight $ 4,586

Shortage $1,346

Cash discounts $5,678

Alterations $342

Senior Citizen Discount $899

Gross margin $140,144

Ans 4

In Percentage Terms

Calculation of Gross Margin		Amount	Percentage terms
Sales		$ 359,818	100%
Less: Purchase at Cost	$ 324,756
Less: Marks down	$ 151,324	$ 173,432	48%
Less: Employee Discounts		$ 33,456	9%
Freight		$ 4,586	1%
Shortage		$ 1,346	0%
Cash discounts		$ 5,678	2%
Alterations		$ 342	0%
Senior Citizen Discount		$ 899	0%
Gross margin		$ 140,144	39%

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Answer 2

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