1.The costume jewelry buyer has bought 8 different styles of gemstone stud earrings. Each one has a different cost, but she thinks that she should group the styles together in a price lining method.

Calculate the IMU %, and the retail for the earrings by style if she groups the earrings into these three price points. Keep all in 99 cent endings

Earrings Cost Retail IMU

Single Clear $2.75 $9.99 _____

Single Ruby $2.95 $12.99 _____

Single Jade $2.95 $12.99 _____

Single Pearl $3.25 $12.99 _____

Multi Colored $4 _____ 80%

Multi Clear $4.25 _____ 78.7%

Multi Silver $4.50 _____ 77.5%

Multi Gold $4.50 _____ 77.5%

2.What is the floor price ________

What is the ceiling price? ________

3.If the jewelry buyer looking to price line her bangles wanted to change the pricing structure below, what would the new prices be if she chose 4 price points? Keep the ending consistent at .95 cents.

Cost Retail Units Sold New PL

Gold Bangles $2.35 $6.95 1800 _______

Silver Bangles $2.45 $7.95 895 _______

CZ Bangles $3.15 $9.95 2450 _______

Multi Strand Beads $4.50 $12.95 1500 _______

Stackables $5.25 $14.95 1000 _______

Multi Gold $6.75 $18.95 950 _______

Multi Silver $7.00 $19.95 925 ________

4.What key element does that buyer need to take into account on the above bangles besides the prices and IMU%?

5.Short answer (complete sentence): What are two good reasons for a retailer to group items together in price lining?