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Review. Return on Investment is a calculation that is used to determine the relative profitability of a product Profit / Investment = Return on Investment Break Even Point is the point at which sales revenue equals the costs and expenses of making and distributing.

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Presentation Transcript
review
Review
  • Return on Investment is a calculation that is used to determine the relative profitability of a product
    • Profit / Investment = Return on Investment
  • Break Even Point is the point at which sales revenue equals the costs and expenses of making and distributing.
    • Price sold at / Cost of making and marking = Break Even
because everyone takes to long to take notes
Because Everyone takes to long to take notes.
  • (P) – Price
  • (D)% - Discount Percent
  • (D)$ - Discount Dollars
  • (NP) – Net Price
  • (SP) – Sales Price
  • (C) - Cost
  • (MM)$ - Maintained Markup Dollar
  • (MM)% - Maintained Markup Percentage
  • (MD)$ - Markdown Dollar
  • (MD)% - Markdown Percentage
  • (MU)$ - Markup Dollar
  • (MU)% - Markup Percentage
profit vs markup
Profit vs.Markup
  • Basic Markup Calculations
    • Cost (C) + Markup (MU) = Retail (RP)
    • Retail Price (RP) – Markup (MU) = Cost (C)
    • Retail price (RP) – Cost (C) = Markup (MU)
percentage markup
Percentage Markup
  • Determine the dollar markup
    • RP – C = MU$
  • Change the dollar markup to the percentage markup, divide it by the retail price. Result will be a decimal
    • MU$/RP = MU%
  • Change the decimal to a percentage
    • .40 = 40%
calculations for lowing prices
Calculations for lowing prices
  • Markdowns – Reduce the quantity of goods in stock, a business will sometimes mark down merchandise by a certain percentage.
    • Retail Price (RP) x Markdown % = (MD)$
    • Retail Price (RP) – Markdown$ = Sales Price (SP)
calculations for lowing prices1
Calculations for lowing prices
  • Maintained Markup – Different between an item’s final sale price and its cost.
    • Retail Price (RP) – Markdown$ = Sales Price (SP)
    • Maintained Markup
    • SP – C = Maintained Markup (MM)$
    • Determine the maintained markup percentage
    • (MM) $ Divided by SP = (MM)%
discounts
discounts
  • Discount is a reduction in the price of good and services sold to customers.
    • Multiply the price by the discount percentage to get the dollar amount of the discount
    • (P) x (D)% = (D)$
    • Subtract the discount from the price to get the net price
    • (P) – (D)$ = NP
discounts1
Discounts
  • Cash Discounts is a discount offered to buyers to encourage them to pay their bills quickly
    • Determine the dollar discount
    • (P) x (D)% = (D)$
    • Determine the net price
    • (P) – (D)$ = (NP)
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