Assignment 2: Final Project: Annie's on Broadway: Fall Quarter

On October 1, 2005, Annie had an opening inventory at retail valued at $195,000.00 with a
MU% at 61.4 percent and by the middle of November, the purchases for the season to date to
carry Annie's through the busy holiday amounted to $375,000.00 at cost. Annie estimates that
she has to achieve a 65 percent cumulative markup in order to meet her year-end profit
projection.
Task
This week, perform the following activities.
1. What will the total dollar value of Annie's merchandise at retail be?
2. What is the MU% that must be applied to the purchases season to date to achieve the planned
cumulative MU% of 65 percent? What course of action would be appropriate to increase MU%?
During this fall quarter, Annie hires two more part-time sales associates for 20 hours per week at an
hourly rate of $8.00 to assist the increased business for the Christmas rush. She hires another part-time
security guard for the quarter at an additional security cost of $2,500.00.
At the close of business on December 31, 2005, the following numbers apply.

Net sales for the fall quarter totaled $905,375.00 with a gross margin of $443,440.00.

Annie increases her advertising expense by $12,000 above her summer advertising expense to
generate greater market visibility and continues promotional events started in summer with
another fashion show and another fashion makeover.

Except as noted, all operating expenses remain same as that at the end of summer. (Remember
to use 52 weeks for a year).

With the given information, create a skeletal P&L statement for the fall quarter.
Deliverable
Use the given template to document your responses. Submit it to the W5: Assignment 2 Dropbox by
Monday, September 23, 2013. You can use the Word or Excel template depending on your comfort
you'll be graded on the calculations and not on the choice of template.
Grading Scale for Assignment Criteria:

Excellent Good Moderate

50 Points
Excellent
45 Points
Excellent

Needs
Below Unacceptable
Improvement Standard
42.5
40
32.5
30
025 Points
Good Moderate
Needs
Below Unacceptable
Improvement Standard
36
36
28.5
27
022.5 Points
Good Moderate
Needs
Below Unacceptable

5 Points

4.5

Improvement Standard
3.5
3

02 Points

Assignment 2 Grading Criteria

Content
Correctly calculated the total dollar value of Annie's
merchandise at retail.
Correctly calculated MU% that must be applied to the
purchases season to date.
Correctly completed a skeletal P&L statement for the fall
quarter.
Describe other course of action that would be appropriate to
increase MU%.
Format
Used the given template to document responses and
submitted it to the W5: Assignment 2 Dropbox by Monday,
September 23, 2013. Used the provided Word or Excel
template.
Total:

Maximum
Points

50

50
50
45

5
200

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