Frankie is a buyer at a department store and is buying some bags at a...
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Accounting
Frankie is a buyer at a department store and is buying some bags at a cost of $30 from a salesperson. He wants to have a 60% profit margin to meet the financial goals for this category.
What will be the retail price of these bags?
After several months, the store experiences some price reductions due to markdowns (sales), employee discounts, and reduced inventory. The amount of reductions is reduced to $15 per bag.
What will be the maintained profit margin of these bags?
What did you learn from this analysis? Was the maintained profit margin less than the planned profit margin? Could price reductions be avoided?
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