5.03 fashion math
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5.03 Fashion Math. 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 day’s activity . - PowerPoint PPT PresentationTRANSCRIPT
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5.03 Fashion Math
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Steps Necessary to Open and Close a Cash Drawer
1. 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 day’s 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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2. 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
1. 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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2. Tell customer the amount of the sale.
3. Repeat to customer how much they handed you (amount tendered).
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4. 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%