gures. Practice Problems Exercise 8.5 1. Develop a merchandise plan on the basis of the information that follows. Sales for the six-month spring- summer season have been planned to total $650,000. Markdowns for the total season are to be 22.0% of planned sales, and season's turnover should be 1.9. BOM inventory values are to be planned by the basic stock method. In this problem, ending inventory will be the same as the average inventory. (A merchandise plan form is provided to complete the problem.) Month % of Season's Sales % of Season's Markdowns February 15.5 15 March 17.5 12 April 19.0 19 May 18.0 16 June 15.5 18 July 14.5 20 (a) Total sales for the season are $650,000. Determine sales for each month. (b) Calculate total $ markdowns and allocate markdowns to each month on the basis of the percentages given. (c) Using the basic stock method, calculate BOM inventory values for each month. (d) Enter the EOM inventory values on the form. July's ending inventory has been given as the average inventory. (e) Calculate planned purchases at retail. (f) Calculate initial markup percent needed, given the following information: Markdowns 22.0% Operating expenses 34.0% Profit desired 7.5%