c5 CUMULATIVE MARKUP Cumulative markup is the average markup resulting from the markup on the beginning inventory and the purchases received during a specified period. Cumulative markup is calculated on a season-to-date basis. 38CUMULATIVE MARKUP Cumulative Markup = Total Retail Price of Merchandising Total Delivered Cost of Merchandise for a Period of Time Cumulative Retail = Beginning Inventory + Receipts Cumulative Markup Percent = Cumulative Markup / Cumulative Retail 39 c5 CUMULATIVE MARKUP CALCULATING CUMULATIVE MARKUP Opening Total Inventory Purchases Handled Retail given C Cost B given D Markup given given E A = Purchases Retail = purchases at cost / (100% - purchases markup percent) B = Opening Inventory Cost = opening inventory at retail X (100% - opening inventory markup percent) C = Total Handled at Retail = opening inventory at retail + purchases at retail D = Total Handled at Cost = opening inventory at cost + purchases at cost E = Total Handled Markup Percent = (total handled at retail - total handled at cost) / total handled at retail 40example 5-24 The shoe department showed an opening inventory of $80,000 at retail with a markup of 48%. During the month, purchases were received in the amount of $30, 000 at cost that were marked up 52%. Find the cumulative markup percent for the department. 41 c5 example 5-24 (continued) Solution Opening Purchases Total Merchandise Inventory Handled Retail 80,000 30,000 / (1- 0.52) 80,000 + 62,500 = 62,500 = 142,500 Cost 80,000 X (1 - 0.48) 30,000 41,600 + 30,000 = 41,600 = 71,600 Markup % 48.0% 52.0% 142,500 -71,600 = 70,900 70,900 / 142,500 = 49.75% 42