Fit & Healthy Gym Ltd (FHG), a registered VAT vendor, also sells sports supplements. Their protein bars and endurance drinks are especially popular. FHG has, therefore, decided to run a promotional campaign named “Extreme Energy” on these items.
You, as a financial manager, need to prepare a spreadsheet that can be imported into FHG’s accounting system. This spreadsheet will contain the new product code for each item that will be used in the extreme energy campaign as well as the new price list.
FGH currently uses gross profit margins to calculate selling prices. You, however, want to move over to using mark-up margins and have decided that this will be a good time to test if this will work.
You have the following information:
a) All the amounts are inclusive of 14% Value Added Tax (VAT)
b) The current product codes and the current sales prices
c) The new product code will consist of the promotional code (cell B3), two special characters (*) and the old product code
The new product code structure is as follows:
Characters 1-2 : EE (promotional code in cell B3)
Characters 3-4 : ** (special characters)
Characters 5-9 : XXXXX (current product code in row 9)
d) The current gross profit margin is 40% (refer to cell B4)
e) The new mark-up margin is 35% (refer to cell B5)