Page 115 - CalcBus_Flipbook

CH 13] Calculating Business 13-1

CHAPTER 13

NOTE TO INSTRUCTOR: Solutions
to Homework are in that section.

Avg. time for Students to read &
Merchandising complete homework: 4.0 hrs.

Objectives

Mastering the material in this chapter and you will be able to:
 Compute trade and cash discounts.
 Compare cash discounts to simple interest.
 Determine credit given for partial payments on invoices. 13
 Use the markup equation to calculate the markup, cost, or selling price
based on cost.
 Use the markup equation to determine the markup, cost, or selling price
based on selling price.
 Compute the rate of markup based on cost or selling price.
 Convert a markup rate from a cost base to a selling-price base and vice
versa.
 Calculate the list price when a trade discount is given.
 Understand the terms of Merchandising

Merchandising is the activity of promoting the sale of goods or services in retail outlets. It
includes branded products such as breakfast foods, books, magazines, music, movies, or as
found in restaurants, banks, or insurance companies. Merchandising is used to promote
specific products to increase sales. A merchandising business is one that purchases finished
products creating a merchandising mix and resells those products to the consumer with a
markup that yields a profit for the merchandiser.

Merchandising firms typically are classified by the type of goods they sell. For example:
J.C. Penney and Macy's are retail department stores, Safeway and Piggly Wiggly are retail
grocery stores; Barnes & Noble is a bookseller; Home Depot and Lowes are home
improvement retailing companies, and Mogenson and Branson LLC is a law firm in Kansas
City merchandising legal services. Other types of merchandising companies include shoe
stores, clothing stores and jewelry stores or those with single products that they
merchandise to retail outlets such as: Springer Mountain Chicken, Zacky Farms, and Land
O’Lakes. All are involved in pricing their products to the consumer.
Retailers bring in products to sell to the consumer or devise services the consumer will
purchase. There are many factors that affect retail pricing that include rent or mortgages on
the building and warehouses; the amortized costs of furniture, equipment and machinery;
the utility costs of gas, electric, water and refuse disposal; Insurance for liability and loss,
wages, and a myriad of taxes that may be required by city government, county government,

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