5.03 Fashion Math

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• 5.03 Fashion Math

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Steps Necessary to Open and Close a Cash Drawer

• Verify the opening change fund is the amount of
  money actually provided for the cash drawer.
• Change fund Coins and currency designated
  for use in opening the register for a given days
  activity.
• Till The cash drawer of a cash register.

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you will have to make a calculation

• Before making any sales for the day
• Count the change fund.
• Compare the actual change fund with the amount
  designated for the day.
• Follow company procedures to record the result
  and to correct any difference before making sales.

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• Balance the cash drawer.
• End of the day.
• Count the cash checks in the drawer.
• Complete a closing balance report.
• Opening change fund cash received from sales
  (minus) cash paid out should equal actual cash in
  the drawer at the end of the day.
• Differences are recorded as cash short or cash
  over on the balance report.

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Cash Sales Transactions

• Determine total due from customer. (you do the
  math)
• Add the retail price for each item to determine
  subtotal.
• Calculate sales tax and add to subtotal. (you
  do the math)
• Sales tax A government fee, usually a
  percentage of the total sale, which is added to
  the retail price of goods paid by the final user.

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1. Tell customer the amount of the sale.
2. Repeat to customer how much they handed you
   (amount tendered).

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• Make change as necessary.
• If register displays the change to be given to
  customer, count out the change back to them
• Always place the money received from the customer
  on the cash drawer ledge until the transaction is
  completed.

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• Count change silently to yourself as you remove
  it from the till.
• beginning with the largest bill and counting up
  to the amount of the change to be returned.

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Retail Sales Terms

• Cost (Cost of merchandise sold) The amount a
  retailer pays the supplier for an item for
  resale.
• Reflects wholesale price, vendor
  discounts/allowances, and transportation charges
• Used to calculate Mark-up on a product

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• Employee discount Set reduction in retail price
  given to employees at time of sales transaction.
• Entices employees to buy the product they sell.
• Typical discounts 10 to 30.

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• Extension The result of multiplying the
  number of units by the cost per unit.
• Final selling price The price at which
  merchandise ultimately sells after all markups
  and/or markdowns are taken.

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• Gross profit Sales revenue minus cost of
  merchandise sold.
• Gross sales Total revenue from sales before
  considering returns, allowances, or adjustments.

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• Initial markup The difference between
  merchandise cost and the selling price originally
  placed on the merchandise.
• Keystone markup A markup equal to the cost of
  the merchandise. Double it
• Keystoning Doubling the cost of the merchandise
  to arrive at the retail price. (you do the
  math)

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• Maintained markup The difference between the
  total cost of the merchandise and its final
  selling price.
• Markdown Used to stimulate sales, dispose of
  slow moving/discontinued merchandise, meet
  competitors prices, and increase customer
  traffic.
• The most common type of retail price change

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• Markup An amount added to the cost of goods to
  reach a selling price.
• Net profit Gross profit minus total operating
  expenses.
• Net sales The revenue generated from sales
  minus sales returns and allowances.
• Retail Price The price the customer pays for
  the merchandise.
• Sales income The money made from sales minus
  returns.

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Basic Markup Calculations (know all of them)

• When cost and dollar markup are known
• Retail Price (RP) Cost (C) Markup (MU)
• Example
• Retail Price (RP)55.00 (C) 45.00 (MU)
• Retail Price (RP) 100.00

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• When retail price and markup are known
• Cost (C) Retail Price (RP) Markup (MU)
• Example
• Cost (C) 100.00 (RP) - 45.00 (MU)
• Cost (C) 55.00

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• When retail price and cost are known
• Markup (MU) Retail Price (RP) Cost (C)
• Example
• Markup (MU) 100.00 (RP) - 55.00 (C)
• Markup (MU) 45.00

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• Markup percent based on retail price
• Used by most department and fashion specialty
  stores
• Markup (MU) Markup (MU) Retail Price (RP)
• Example
• Markup (MU) 200 (RP) - 105 (C) 200
  (RP)
• Markup (MU) 95 (MU) 200 (RP)
• Markup (MU) .475 or 47.5

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• Markup percent based on cost
• Used by some small businesses
• Markup (MU) Markup (MU)
• Cost
  (C)
• Example
• Markup (MU) 210 (RP) - 120 (C)
• 
  120 (C)
  
  
  
  
  
• Markup (MU) 90 (MU) 120 (C)
• Markup (MU) .75 or 75
• Know how to change a to decimal.

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Reasons for Marking Down Retail Price

• Buying errors
• Pricing errors
• Special sales
• Broken assortments
• Reduction of goods in stock

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Calculate Markdown(know how to calculate)

• Markdown (MD) Retail Price (RP) X
• Markdown percentage (MD)
• Example
• Markdown (MD)195.00 (RP) X 30 (MD)
• Markdown (MD) 58.50

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• The New Retail Price (after a markdown is
  taken) Original retail price (RP) Markdown
  (MD)
• Example
• New Retail Price (RP) 195 (RP) -
  58.50 (MD)
• New Retail Price (RP) 136.50

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Markdown Percentage

• Calculated for a specific time period
• Expressed as a percentage of net sales, which
  cannot be calculated until the merchandise is
  sold
• Used in planning and forecasting
• Markdown (MD) Dollar Markdown (DMD) Net
  Sales (NS)
• Example
• Markdown (MD) 10,000 (DMD) 550,000 (NS)
• Markdown .01818 or 1.8