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Assignment 2: Final Project: Annie’s on Broadway: Spring Quarter The spring quarter started with brisk sales due to an early Easter spring promotion. However, by mid-May a sales slump occurred. It happened primarily due to ―flirty spring outfit‖ line offered by Nordstrom and Macy’s. This line is similar to that offered by Annie’s on Broadway. Nordstrom’s and Macy’s are located in the same mall and are promoting their new line through television and print media. Customer returns and allowances at
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  Assignment 2: Final Project: Annie’s on Broadway: Spring Quarter  The spring quarter started with brisk sales due to an early Easter spring promotion. However, by mid- May a sales slump occurred. It happened primarily due to ―flirty spring outfit‖ line offered  by Nordstrom and Macy’s. This line is similar to that offered by Annie’s on Broadway.  Nordstrom’s and Macy’s are located in the same mall and are promoting their new line through television and print media. Customer returns and allowances at Annie’ s on Broadway increased whenever Annie wasn’t present during store hours of operation. Annie purchased several closeout lots of discontinued but still-in-style accessories, such as belts and scarves, to bundle with her merchandise to increase her competitive edge against the large-scale retailers. However, this strategy was too late to salvage a decline in revenue for May. In June, Annie holds an unplanned Summer Fun selling event and initiates storewide price reductions of 15 percent on everything sold. This successfully reduces the customer returns. At the end of the quarter ending June 30, 2005, the following figures apply. April gross sales (GS) $84,550.00 April customer returns and allowances % (CRA%) 3% April markup % (MU%) 62.4% May GS$ $44,000.00 May CRA$ $9,000.00 May MU% 49.3% June GS$ $35,500.00 June CRA$ $1,000.00 June COGS% 34.9% Operating expenses remain the same. This week, perform the following activities. 1.   Complete the skeletal P&L statement for the spring quarter. Compare it with the winter quarter skeletal P&L statement to explain the changes which have taken place. 2.   Which month on the spring skeletal P&L statement attained the highest MU%? Why? 3.   Compare CRA% for June vs. April. Explain the cause of difference between the two values. 4.   What would you suggest to Annie for the summer quarter, to correct the situation seen in the spring skeletal P&L statement? Calculate and present data to support your suggestion assuming a 7 percent decrease in operating expenses and a 10 percent increase in net sales. Deliverable    Use the given template to document your responses and submit it to the W3: Assignment 2 Dropbox  by Monday, September 9, 2013 . You can use the Word or Excel template depending on your comfort  —you’ll be gr  aded on the calculations and not on the choice of template. Grading Scale for Assignment Criteria:   Excellent   Good   Moderate   Needs Improvement   Below Standard   Unacceptable  5 Points 4.5 4 3.5 3 0  –  2 Points Excellent   Good   Moderate   Needs Improvement   Below Standard   Unacceptable  10 Points 8.5 8 6.5 6 0  –  4 Points Excellent   Good   Moderate   Needs Improvement   Below Standard   Unacceptable  15 Points 12.5 12 9.5 9 0  –  6 Points Excellent   Good   Moderate   Needs Improvement   Below Standard   Unacceptable  20 Points 16.5 16 12.5 12 0  –  8 Points Assignment 2 Grading Criteria   Maximum Points   Content  Correctly completed the skeletal P&L statement for spring. 20  Compared the skeletal P&L statements of winter and spring quarters and explained the changes. 20 Identified the month with highest MU% and justified the response. 20 Explained the cause of difference between CRA% for June vs. April. 20 Correctly calculated the data and presented it to support the suggestion. 20 Suggested ways to correct the situation in the skeletal P&L statement for spring. 20 Format  Used the given template to document responses and submitted it to the W3: Assignment 2 Dropbox  by Monday, September 9, 2013 . Used the provided Word or Excel template. 5 Total:   125    For assistance with any problems you may have when completing this assignment — OR — to offer your assistance to classmates, please use the Problems and Solutions Discussion area located through the left side navigation link.
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