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Abstract

The general objective of the paper can be summarized as developing a methodology for relating retail store cost and profits to individual products. Specifically procedures are formulated for deriving estimates of: 1. Margin, cost, and profit components for the total store. 2. Margin, cost, and profit components for five departmental breaks, 3. Margin, cost, and profit components for selected individual products. To satisfy this objective, the approach was to develop an integrated set of data which bridges a firm's data and information relating to a specific product. Other alternatives were also considered for allocating joint costs. Specifically, percent of sales, percent of gross margin, equal profitability, and others.

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