A local supplier has 75 Berryville Bobcats baseball caps she would like to sell to Tucker's Grocery.

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Question:

A local supplier has 75 Berryville Bobcats baseball caps she would like to sell to Tucker's Grocery. The hats would cost $6.00 apiece. To obtain a 40% initial markup on the hats, what price would the store need to place on the hats?

2. Mr. Howard runs a small clothing store. Mr. Howard's store is carrying a new dress which costs $40 and retails for $80. What is the markup % on this dress?

3. The coat which matches the dress in Question 2 costs $105 and Mr. Howard is planning on selling it for $200. What is the initial margin % for the coat?

4. Ray Tucker, owner of Tucker Grocery, does all of the buying for his company. Recently, Coca-Cola offered Ray a deal on 2 pallets of Coke and Diet Coke for Homecoming weekend. Each pallet contains 50 24-pack cases (½ Coke, ½ Diet Coke.) Normally the cost per case is $4.00 and the retail is $5.00. Coca-Cola is now offering Ray a cost per case of $3.85.

Part 1 - If Ray would like to maintain the same initial markup % (as he had at the $4.00 cost) on the cases of Coke and Diet Coke, what price should he now sell the cases of Coke and Diet Coke for?

Part 2 - If Ray decided that he wanted to maintain the same "penny profit," would his price for the cases of Coke and Diet Coke be the same as the amount you just calculated?

Part 3 - What will Ray's dollar profit be on the cases of Coke and Diet Coke if he sells all the cases at the price you calculated in Part 1?

5. Tucker Grocery has a small diaper category, with three brands of diapers. The cost of Brand 1 is $12 with a retail price of $15; Brand 2's cost is $7 with a retail price of $14; and Brand 3's cost is $14 with a retail price of $16. What is the initial margin mix on diapers?

6. A department store budgets $1,000 for a variety of straw handbags for summer. Their target initial margin is 70%. The first $250 of handbags arrives and they are priced at $350. If you are the buyer for the store, what do you need to price the remaining handbags for to achieve the targeted initial margin mix?

7. A grocery store can purchase watermelons from a local farmer for $2 each. The buyer believes that at a price of $5 they can sell 300 watermelons this week, but if they drop their price to $4 they could sell 500 watermelon in a week. What is the best price?