Math in the Workplace - Numbers & Operations
FRED MEYERS
Retail Store Operations
Store level management
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Job Description: Retail store operations including pricing control, inventory control, employee supervision, customer service and loss prevention. Budgeting and scheduling are also common duties. |
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Problem:
1. In a retail store, the profit on a product is calculated as a percent of the retail price to the customer. This is called margin.
If the store pays $8.00 for a music CD and wants to make a 20% margin, what would the retail sales price need to be?
2. Margin differs from markup. Markup is the percentage of profit based on the cost of the item while margin is based on the sales price of the item.
If the store pays $8.00 for a music CD and wishes a 20% markup, what would the sale price be?
Generally speaking, businesses use the margin method to calculate the sales prices of their merchandise.
 FRED MEYERS
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Solution:
1. Retail price with a 20% margin:
Divide the cost of the CD by 100% less the margin (20%)
$8.00
(100% - 20%) |
= |
$8.00
.80 |
= $10.00 retail sales price |
2. Retail price with a 20% markup:
Multiply the cost of the CD by 100% plus the markup (20%)
$8.00 x (100% + 20%) = $8.00 x 1.2 = $9.60 retail sales price