Generally Accepted Accounting Principles and Profit Margin Percentage

Place your clear and the date at the top of the page, and answer the following questions making confident(predicate) you SHOW YOUR WORK. 1. A hardware store bought a gross (12 dozen) of hammers, nonrecreational $602. 40 for the total order. The retailer estimated operating expenses for this product to be 35% of gross revenue, and wanted a net profit of 5% of sales. The retailer anticipate no markdowns. What retail merchandising price should be set for severally hammer? Hint The way to handle this problem is to say that the Gross addition Margin has to cover the 35% of expenses applicable to the product plus the 5% of net profit wanted.And once you realise the GPM%, you know the Cost contribution of the Selling Price. 2. Competition in a line of sporting goods limits the selling price on a certain item to $25. If the store owner feels a moulding of 35% is needed to cover expenses and return a reasonable profit, what is the most the owner can pay for this item? Hint Remember , if you know the margin percentage, then you know the cost percentage. 3. A retailer with one-year net sales of $2 million maintains a markup of 66. 67% base on cost.Operating expenses average 35%. What are the retailers gross margin and net profit in dollars? Hint A Markup on Cost is tant measurement(predicate) to what Gross Profit Margin percentage? 4. The cost to a manufacturing business of flat panel presentations for producing its newly designed TV show thou is $250. 00. The cost for Research and Development of their new product being exchange to OEMs as a component product has been one million dollars. The sales and promotional budget is $600,000, and all other fixed costs amount to $200,000.The Marketing Director and his staff have estimated demand for the new display to be between 50,000 and 75,000 units over the next year. They also have obdurate to price the new Display 1000 at $450 to their OEM customers. (a) How many Display 1000s does the manufacturer have to sell in order to breakeven? (b) What is the manufacturers unit contribution to profit in percentage? (c) What is the manufacturers markup on cost in percentage?