Pricing Merchandise

Exercise 2 

Solve the following problem:

1. Equipment of $500 is sold to a retailer at a 25 percent trade discount. What is the retailer's cost?

2. Determine the last day allowable for a company to take advantage of the full discount.
                                                                             
         Term                        Date of Order                  Date of Delivery

a).  2/10, n/30                       March 4                            March 8
b). 2/10, 1/15, n/30               March 4                            March 8
c). 2/10, n/30, ROG              March 4                            March 8
d). 2/10, n/30, EOM             March 4                            March 8



3. Company X gives terms of 30 percent discounts on all items purchased. Company Y gives chain discounts    of 18 percent and 9 percent. If Shehgarlynn bought $750 of supplies, how much would be save by dealing with Company Y rather than with Company X?
     
4. If freight of $35 were added to the purchase in Problem 1, What would be the net cost?

5. Determine the single equivalent discount in each of the following:
a). 20 percent, 5 percent;
b). 25 percent, 10 percent

6. Office supplies selling $18 per box have a markup on cost (markon) of 25 percent. What is the cost of one box?

7. Shehgarlynn bought $950 of goods for her company on January 1, subject to a  20 percent trade discount, bearing terms 2/10, 1/20, n/30. If the invoice was paid on January 7, how much was her payment?

8. The following information, determine the merchandise inventory turnover.

             Cost of Goods Sold:
                 Merchandise Inventory, Jan. 1         $28,000
                 Purchases (net)                                 69,500
                 Available for Sale                              97,500
                 Merchandise Inventory, Dec. 31        14,500
                 Cost of Goods Sold                                         $83,000

9. From the selected information below, determine:
a). Turnover of inventory
b). Average daily cost of goods sold
c). Number of days' sales in inventory

               Cost of Goods Sold                             $850,000
                Inventory (Beginning)                              93,000
                Inventory (Ending)                                  69,000

10. A watch that costs $55 is marked up 30 percent on cost. What is the selling price?