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Please answer the discussion and numbered problems

Short Answers: 4 pts

1. Differentiate between the four major causes for taking markdowns?

2.  Why is the timing of markdown an important consideration for the success of markdown?

3. What are the advantages of taking markdowns?

4. What are the 3 categories retail reductions? Provide definition for each

Quantitative Problems: 6 pts

Basic Markdown Practice Problems

· Page 110: Question: 45, 47, 48, 50,

45) The men’s shirts buyer for the Best Department Store is taking a markdown on short sleeve denim shirts for Father’s Day. All $99.00 shirts will be markdown to $69.99. Calculate the markdown dollars for the shirts. 

47) The bedding buyer is running a promotion on sheet sets for a back-to- school sale. All twin-size sheet sets will be promoted at 33% off. The sheet sets regularly retail at $69.00. What are the markdown dollars and the new retail price for the sheet sets?

48) The boy’s buyer is taking a markdown on licensed T-shirts. All licensed T-shirts that have a suggested retail of $24.00 will be promoted at 20% off. Calculate the markdown dollars and the sale price for the licensed shirts.


Regular price x

Percentage off =

MD $ x

Units sold=

Total MD $

New retail price

a. $24.00






b. $39.00






c. $59.99






d. $120.00






Planned and Actual Markdown Practice Problems,

· Page 112- 114: Question: 53, 54, 55, 58, 59, 60, 61

53) The gift department took markdowns in December of $11,000, and its December sales were $27,500. What is the markdown percentage for the gift department in December?

54) The junior sportswear buyer planned sales for the month amounting to $700, 000. The markdown percentage was planned at 36.5%. What were the planned markdown dollars?

55) The yearly planned sales for men’s are $365,000, and the planned markdown % for the year is 42.0%. Calculate the planned markdown dollars for the year in men’s.

58) The handbag department’s planned markdown percentage for last year was 37.6%, and the planned sales were %750,000. If actual markdown totaled $295,000, was the buyer over or under the markdown plan, and by how much in dollars?

59) In July, a towel buyer took markdowns totaling $18,000. During this month, the net sales for the department were $34,000. If the net sales plan was $36,000 and the original markdown plan for this month called for 58% markdowns, was the actual markdown taken over or under the original plan, and by how much in dollars? What was the actual markdown percentage?

60) The seasonal plan for a shoe department shows planned sales of $753,000, with planned markdowns of 56.4%

a. What is the planned dollar amount of markdowns?

b. If the actual markdowns are $450,000 on actual sales of $800,000, are actual markdowns taken more or less than planned? By how much? What is the actual markdown percentage?

61) What reason could cause a buyer to be over markdowns in a given time period?

Compounding of Markdowns Practice Problems,

· Page 115: Question: 62, 63, 64

62) For a one-day sale the entire stock of cashmere sweaters with an original retail of $99.00 will be promoted at $20.00 off. In addition, customers w be able to use an additional 15% off coupon. Calculate the final selling price for the cashmere sweaters.

64) The sandal buyer is planning a Memorial Day sale event on all $79.00 sandals. The sandals will be promoted at $60.00. There will be a coupon in the sale circular for customers to take an additional 25% off their purchase. What will be the final selling price for the sandals? What is the markdown percentage that the customer actually receives and the retailer journalizes?

$79.00 = 60 x .25 = 45

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