Question

A computer with a manufacturer's suggested list price of $1400 is supplied with trade discounts of 40/10. The invoice is dated October 27th and paid in full on November 15th. Cash terms are 8/10, 2/20, EOM. The computer is priced with a 35% markup based on selling price. During a Thanksgiving Turkey sale the price is markdown by 25%. In December a second markdown of 10% is applied to the sale price. Determine the December sale price of the computer.

Calculate the net price after the trade discounts have been deducted.

Determine the amount submitted on November 15th to pay the invoice in full.

Determine the original selling price.

Determine the November Sale price

Determine the December Sale Price

Answer #1

Solution

Calculation of net price after trade discount have been deducted:

Sales price = $1,400

Markdown of 10%, complement percent = 90%

Trade discount = 40%; complement percent = 60%

Net price = 1,400 x 60% x 90% = $756

Amount submitted on November 15^{th} to pay the invoice
in full,

Invoice is paid in 19 days (Oct 27 – Nov 15), hence 2% discount is applied.

Amount paid = $756 x 98% = $740.88

Markup based on selling price – 35%

Original sale price = $740.88 x 135% = $1,000.19

November sale price, (markdown by 25%) = $1,000.19 x 75% = $750.14

December sale price = (markdown by 10%) = $750.14 x 90% = $675.13

A manufacturer of women’s blouses quoted terms of 3/10, n/30,
EOM and grants trade discounts to in the amounts of 15 percent, 10
percent, and 4 percent. The list price of the blouses is $400 per
dozen. A retailer receives an invoice dated October 29 for nine
dozens of these blouses. The invoice is paid December 2. What is
the net cost to the retailer per blouse?
Invoice amount = $400/doz x 9 = $3,600
Dated: October 28th
Arrives: November...

1.Mel's furniture received an invoice dated September 27 for
five bedroom sets at $3,000 each. The invoice indicated a trade
discount of 5/8/3. The seller of the furniture prepaid the freight
of $200. Terms were 2/10 EOM. Assuming Mel pays on November 2, what
amount would be paid? (Be sure to include the freight cost.) (Round
your answer to the nearest cent.)
2.Calculate the final selling price to the nearest cent (Round
each calculation to nearest cent as needed):
Original...

Nelson Hardware ordered a shipment of gas barbecues at a
suggested retail price of $459 less trade discounts of 25% and 10%.
The manager intends to sell the barbecues at the suggested retail
price. If overhead expenses are 20% of the selling price.
a) What will be the unit operating profit?
b) What is the rate of markup (on cost)?
c) What is the gross profit margin?
d) What would be the break-even selling price for an inventory
clearance sale?

Mattel Responds to Ethical Challenges Business Ethics This case
was written by Debbie Thorne, John Fraedrich, O. C. Ferrell, and
Jennifer Jackson, with the editorial assistance of Jennifer
Sawayda. This case was developed for classroom discussion rather
than to illustrate either effective or ineffective handling of an
administrative, ethical, or legal discussion by management. All
sources used for this case were obtained through publicly available
material. Mattel, Inc. is a world leader in the design,
manufacture, and marketing of family...

ADVERTISEMENT

Get Answers For Free

Most questions answered within 1 hours.

ADVERTISEMENT

asked 14 minutes ago

asked 23 minutes ago

asked 26 minutes ago

asked 32 minutes ago

asked 40 minutes ago

asked 1 hour ago

asked 1 hour ago

asked 1 hour ago

asked 2 hours ago

asked 2 hours ago

asked 2 hours ago

asked 3 hours ago