Question

	Landscape Wholesalers sells shrubs and trees to Adams Farm during 2018.
	It offers Adams the following rebates based on total sales.
		Units	Rebate
	Sales from 3,000 to 4,999	3,000	2%
	Sales from 5,000 to 6,999	5,000	4%
	Sales of 7,000 and up	7,000	6%
	In the first quarter of the year, Landscape Wholesalers sells 2,000 trees to Adams Farm at
	a sales price of $90,000.
	Landscape Wholesalers, based on past experience, has sold 10,000 units to Adams, and
	most of those sales normally take place in the fourth quarter of the year.
	What amount should Landscape report for the sale of the 2,000 units during the
	first quarter?	_______________

Answer 1

The unit price

= 90,000/2,000

= $45

Now expected rebate per year

= 7,000×6%×45

= $18,900

Now relative discount on 2,000 units in first quarter

= 18,900×2,000/10,000

= $3,780

So, Sales report for 1st quarter

= 90,000 - 3,780

= $86,220

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