CONTENT/TEACHING OUTLINE COMPETENCY: OBJECTIVE: 4.00 4.

03 Develop customer service skills needed in the sports and entertainment industry. Solve related mathematical problems.

A. Understand the cash drawer. 1. Opening cash fund a. The opening cash drawer contains the coins and currency for the days business. b. If there is more than planned in drawer, the till is over. c. If there is less than planned, the till is short. d. Report discrepancies to supervisor. 2. Balancing the cash drawer a. At end of shift, the drawer must be balanced. b. The money must be counted and a balance report filled out. B. Complete a sales transaction. 1. The extension is the result of multiplying the number of units by the cost per unit. 2. Add item amounts. 3. Calculate sales tax and total. C. Identify types of retail sales. 1. Cash sales include cash or checks. 2. Debit cards are bankcards or automatic teller machine (ATM) cards used to make a purchase in the same way a credit card is used, except the funds are withdrawn from the customers checking account. 3. Visa, MasterCard, American Express, Discover are examples of credit cards used in credit sales. D. Explain cost of merchandise sold. 1. The cost of merchandise sold is the amount a retailer actually pays for merchandise. The cost of merchandise sold is determined by quoted wholesale cost, discounts, and transportation charges. 2. One of the major expenses for wholesalers and retailers is the cost of merchandise purchased for resale. 3. Factors affecting the cost of merchandise should be negotiated whenever possible. These factors include: a. Cost. Cost may not be negotiable. However, when combined with available discounts and terms, the quoted cost is rarely the amount paid by the retailer for the merchandise. b. Discounts. A reduction in the selling price offered by manufacturers and distributors to their customers to encourage prompt payment and stimulate purchasing. c. Allowances. A manufacturer often gives free merchandise for large orders as a means of goodwill and to encourage future purchases.

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CONTENT/TEACHING OUTLINE COMPETENCY: OBJECTIVE: 4.00 4.03 Develop customer service skills needed in the sports and entertainment industry. Solve related mathematical problems.

E. Explain the difference between profit and markup. 1. Profit is the amount left from revenue (sales) after the costs of merchandise and expenses have been paid. Expenses include such things as rent, utilities, and salaries. 2. Markup is the difference between retail price and cost. In order for a business to be profitable, its markup must be high enough to cover expenses and maintain desired profit. F. Explain and calculate gross and net profit. 1. Gross profit is a businesss income minus the cost of goods sold. a. Income for is the total of all sales for the time period minus any sales returns and allowances. b. Cost of goods (merchandise) sold is the actual amount paid to the vendors for the merchandise. 2. Net profit is what is left after all expenses have been paid by the business. G. Explain basic markup calculations. 1. Calculate retail price. The most basic pricing formula is the one for calculating retail price when given cost and dollar markup.

RETAIL PRICE (RP) $500 RETAIL PRICE (RP) $500

= COST (C) + MARKUP (MU) = $300 + $200 = COST (C) / = $300 / 1- MARKUP (MU) % 1- 40%

2. Calculate cost and markup: Formulas for cost and markup can easily be derived from the formula, RP = C + MU.

C = RP MU $300 = $500 - $200

MU = RP C $200 = $500 - $300

3. Calculate markup percentage. a. Markup percentage based on retail. To determine markup percentage, divide dollar markup by retail price.

MU% BASED ON RETAIL 40%

= DOLLAR MU / = $200 /

RP $500

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CONTENT/TEACHING OUTLINE COMPETENCY: OBJECTIVE: 4.00 4.03 Develop customer service skills needed in the sports and entertainment industry. Solve related mathematical problems.

b. Markup percentage based on cost. To determine markup percentage based on cost, divide dollar markup by cost.

MU% BASED ON COST = DOLLAR MU / 66.67% = $200 /

C $300

H. Explain reductions in selling price. 1. Reasons for markdowns. a. Buying errors. Wrong styles, color, sizes, materials, and/or quantities have been purchased. b. Pricing errors. Initial price may be set too high, leading customers to a lower priced competitor. c. Special sales. Regular stock may be marked down for a special sales event, or a retailer may buy particular goods to sell at promotional prices. 2. Calculate markdowns. a. Markdowns are the most common type of price change. b. Markdowns are used as a tool to stimulate sales, dispose of slow moving/discontinued merchandise, meet competitors prices and increase customer traffic.

MARKDOWN (MD) = RETAIL PRICE X MD % $25 = $100 X 25%

3. Find markdown percentage. a. Markdowns are expressed as a percentage of net sales and cannot be calculated until merchandise is sold. b. Markdown percentages are usually calculated for a specific period of time rather than on individual items.

MD% = DOLLAR MD / 1.8% = $10,000 /

NET SALES $550,000

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CONTENT/TEACHING OUTLINE COMPETENCY: OBJECTIVE: 4.00 4.03 Develop customer service skills needed in the sports and entertainment industry. Solve related mathematical problems.

Resources Printed References: Marketing Essentials, 3rd ed., pp. 272-293. Sports and Entertainment Marketing, pp. 26, 48, 70, 96, 118, 140, 162, 194, 216, 242, 268. Marketing, pp. 60, 104, 319, 360-363, 379, 384, 388, 459, 471-472. Suggested Activities: Ask students what they think is an average dollar amount for a days business opening cash drawer. Now divide that into specific currency amounts, for example how many 20s, 10, 5s, 1s, quarters, dimes, nickels, pennies. Give students different types of businesses. Have students copy all the formulas related to this objective onto an index card. Next pair the students and have them create problems for each formula and solve. Have students switch problems with their partner and solve for each. Select a few students to place their equations on the board for the entire class to solve. There is a 4.00 project at the end of this competency. Websites:

Teacher Notes

Other Resources: 4.03 PowerPoint Presentation

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