FM 3330 Buying Principles
Dr. Bedford
Chapter 2.2 Practice Problems
Please show your work (setting up the formulas) so I can see that you're setting them up correctly
as well as give partial credit if the numbers are off, but the work is correct. You can either do this
typed on the computer and upload your word doc or handwritten and scan the page and upload it
that way.
1. The swimwear buyer for an off-price retailer is taking a clearance markdown on the
balance of inventory for swim cover-ups that were originally priced at $29.99 to $19.98.
What are the markdown dollars for each coverup?
$29.99-$19.98 = $10.01
2. The boy’s buyer is taking a markdown on licensed T-shirts. All licensed T-shirts that that
have a suggested retail of $24.00 will be promoted at 20% off. Calculate the markdown
dollars and the sale price for the licensed shirts.
$24.00 X .2 = $4.80 markdown
$24.00-$4.80= $19.20 sale price
3. The shoe department’s Spring season markdown dollar plan is $187,000, and the planned
net sales for spring are $580,00. Calculate the markdown percentage for the Spring
season in shoes.
MD% = MD$/Sales$
$187,000/$580,000= 32.2 MD%
4. The junior sportswear buyer planned sales for the month amounting to $700,000. The
markdown percentage was planned at 36.5%. What were the planned markdown dollars?
$700,000 X 36.5% = $255,500 MD dollars
5. The handbag department’s planned markdown percentage for last year was 37.6%, and
the planned sales were $750,000. If actual markdowns totaled $295,000, was the buyer
over or under the markdown plan, and how much in dollars?
Planned MD = $750,000 X 37.6% =$ 282,000
$282,000-$295,000 = -$13,000 or over $13,000
6. For a one day sale the entire stock of cashmere sweaters with an original retail of $99.00
will be promoted at $20.00 off. In addition, customers will be able to use an additional
15% off coupon. Calculate the final selling price for the cashmere sweaters.
$99.00-$20 = $79 promo price
79 X 15% = $11.85 coupon discount
$79-$11.85 = $67.15 final price
7. The sandal buyer is planning a Memorial Day sale event on all $79.00 sandals. The
sandals will be promoted at $60.000. There will be a coupon in the sale circular for
customers to take an additional 25% off their purchase. What will be the final selling
price for the sandals? What is the markdown percentage that the customer actually
receives, and the retailer journalizes?
$79-$60 = $19 promotional discount
$60 X 25% = $15 coupon discount
$60-$15= $45 final price
$19 + $15 = 34 total markdown $
MD% Customer:
34/79 = .43 or 43% markdown
MD% Journalized
34/45 = .755 or 75.5% markdown
8. The missy top buyer ran a point-of-sale promotion on denim shirts for the tax-free
weekend at $69.99. Here is what was sold during the sale:
● 270 shirts with an original retail of $99.00.
● 180 shirts with an original retail of $89.00.
Calculate the following:
a. Total markdown $ for the sale.
b. Total sales $ generated for the sale.
c. Markdown % for the sale.
Total MD$
$99-$69.99= $29.01 X 270 shirts = $7,832.70 MD
$89-$69.99 = $19.01 X 180 shirts = $3,421.80 MD
Total MD= $7,832.70 $3,421.80 = $11,254.50
Total Sales
270+180 = 450 shirts @ $69.99 =$31,495.50 total sales
MD%
$11,254.50/$31,495.50 = 35.7%
9. The shoe buyer ran a point-of-sale promotion on ballet flats for a Spring Sale weekend at
30% off. Here is what was sold during the sale:
a. 600 ballet flats with an original retail of $79.
b. 720 ballet flats with an original retail of $69.
Calculate the following:
a. Total markdown $ for the sale.
b. Total sales $ generated for the sale.
c. Markdown % for the sale.
$79 Flats: $79 X 30% = $23.70 MD X 600 Flats = $14,220
$69 Flats: $69 X 30% = $20.70 MD X 720 Flats = $14,904
Total MD: $14,220+$14,904 = $29,124
Sales:
600 Flats @ $55.30 ($79-$23.70) = $33,180
720 Flats @ $48.30 ($69-$20.70) = $34,776
Total Sales: $33,180+$34,776 = $67,956
MD% = $29,124/$67,956 = .428 or 42.8%
10. The dress buyer bought 150 “little black dresses” to retail at $90. At this price only 30
were sold. The buyer then took a permanent markdown to $69.99. At this price 50 dresses
were sold. The buyer then took another permanent markdown to $49.99 and 50 more
were sold. Calculate the following:
a. The total markdowns $ for this sale.
b. Total sales generated for this sale.
c. Total markdowns % for this sale.
150 units OH (on hand) Week 1
-30 units sold @ $90.00
= 120 units MD to $69.99
-50 units sold @ $69.99
= 70 units MD to 49.99
-50 units sold @ 49.99
= 20 units OH
Total MD:
$90-$69.99= 20.01 X 120 units = $2,401.20
$69.99-$49.99= 20 X 70 units = $1,400
Total MD= $2,401.20+$1,400 = $3,801.20
Total Sales:
$90 X 30 units = $2,700
69.99 X 50 units = $3,499.50
49.99 X 50 units = $2,499.50
Total Sales = $2,700+$3,499.50+$2,499.50 = $8,699
MD% = $3,801.20/$8,699 = .436 or 43.6%
11. A buyer purchases 1,200 sandals from a vendor to retail at $89.00. In the first week, the
buyer sold 30 pairs at regular price.
a. Calculate the WOS and ST% for week 1.
b. The second week, the buyer sold 40 pairs at regular price. Calculate the WOS and
ST% for week 2. What was the build in unit sales for week 2 from week 1?
c. The third week, the buyer took a POS markdown to $69.99 and sold 65 pairs.
Calculate the WOS and ST% for week 3.
d. What is the markdown% to the customer and what is the markdown % to the
retailer (journalized)?
e. Calculate the build in unit sales from week 3 to week 2.
1200 units OH @ $89.00 Week 1
-30 units sold @ $89.00
=1170 units OH @ $89.00 Week 2
-40 units sold @ $89.00
=1130 units MD to 69.99 Week 3
65 units sold @ $69.99
=1065 units OH @ Week 4
WOS Week 2
ST%
1170/40 = 29.25 Weeks of Supply
40/1170 = 3.4% ST
Build For week 2 from week 1:
40-30/30 = 33.3%
WOS Week 3
ST%
1130/65 = 17.39 Weeks of Supply
65/1130 = 5.8%
Build for week 3 from week 2
65-40/40= 62.5%
89-69.99 = 19.01 MD$
MD to customer
MD Journalized
19.01/89 = 21.4%
19.01/69.99 = 27.2%
12. For spring, you purchased 640 pairs of men’s fashion denim jeans that retail at $149.
a. In the first week, you sold only 25 pieces. Calculate the WOS and ST% for Week
1.
b. In Week 2, the decision was made to take a POS markdown to $99.99 and you
sold 55 pieces. Calculate the WOS, ST%, build, and markdown to the customer
and to the journal.
Week 1 WOS
ST%
640/25 = 25.6 WOS
25/640 = 3.9%
Week 2 WOS
ST%
Build
615/55 = 11.18 WOS
55/615 = 8.9%
55-25/25 = 1.2%
149-99.99 = 49.01 MD$
MD to Customer
MD Journalized
49.01/99.99 = 49%
49.01/149 = 32.9%