5. For the Fourth of July, Ray (manager of Tucker’s Grocery)decided to try to sell some red, white and blue T-shirts with theBerryville logo and fireworks on them. Ray bought 100 of theseT-shirts at $3.00 apiece and decided to sell them for $5.00 each.The shirts weren’t as popular as Ray had expected. By July 5, Rayhad sold only 30 of the shirts. He decided to mark the shirts downto $4.00 apiece. By July 20, Ray sold 20 more shirts. He thenmarked the remainder of the shirts down to $3.00 each and sold therest by July 30.
Part 1 - Please calculate the initial margin, markdown dollars,markdown percent, maintain margin dollars, and maintain marginpercent for the T-shirts.
Part 2 – Based on the numbers found in Part 1, would yourecommend Ray make a similar purchase next year? If Ray does decideto purchase the t-shirts again next year, would you recommend anychanges to his pricing strategy? What and why?
