This is Business Calculations class

You are the owner of a brand new clothing store and are determining how much you should markup a polo shirt.

You recall that the markup that a retail store actually realizes on the sale of its goods is called maintained markup. It is what is achieved after retail reductions (markdowns) have been subtracted from the initial markup. Maintained markup is one of the keys to profitability in retailing. It is the difference between the actual selling price and the cost and therefore has a direct effect on net profits.

Maintained Markup = Actual selling price - cost

Actual selling price

You are the buyer for your new clothing stores. For the spring season, you purchased a line of polo shirts with a manufacturers suggested retail price of $XX.XX (higher than cost). Your cost was $XX.XX (lower than suggested retail price) per shirt.

1. What is the initial percent markup based on selling price?

2. The shirts did not sell as expected at the regular price, so you marked them down by $5 and sold them out. What is the maintained markup on the shirts?

3. When you complained to the manufacturers sales representative about having to take excessive markdowns in order to sell the merchandise, she offered a $2 rebate per shirt. What is your new maintained markup?