Question

(A) One quotation was sent to customer as following. Price: US$10.00/case Term: Rebate to distributor 10% Commission to sales: 5% Customer complained the price too high, the distributor accepted the rebate down to 5% and commission down to 3% after negotiation. What is the new price that we can sell with same margin? (B) We have one shopping bag order- Q'ty: 3,000 cases Case weight: 14 lbs/case We placed the order to one vender based on the cost structure as following. (1) Material cost: US$ 1,300/ton 1 ton = 2204.6 lbs (2) Conversion cost: US$ 300 / ton (3) Ocean freight: US$ 4.000 / 40' container One 40' container is able to carry 42,000 lbs (4) Inland freight: US$ 1,000/40' container (5) U.S. custom duty: 3.5% (6) Unloading: US$ 0.05/lb What is the total cost for all above each case? If we need to reserve 10% profit and 3% of selling price to sales, what is the final price that we have to sell? (C)John has plenty of Quarter, Dime, Nickel Coins to pay toll, how many payment methods can he pay for US$ 1.35? For example: (1) 27 nickels (2) 5 quarters and 1 dime Please list all of the payment methods.

Answer 1

A). The price of the case = $10

Rebate to distributor @10% = $10 * 0.10 = $1

Commission to sales @5%= $10 * 0.05 = $0.5

The price to be paid by the customer = $10 + $1 + $0.5 = $11.5

But after the complaint, rebate reduced to 5% and commission down to 3%.

Rebate to distributor @5% = $10*0.05 = $0.5

Commission to sales @3% = $10 * 0.03 = $0.3

The price to be paid by the customer = $10 +$0.5 + $0.3 = $10.8

B).

Cost for 3,000 cases

	Calculation	Amount
Material cost	19.05tonnes *$1300	24,765
Conversation cost	19.05 tonnes *$300	5,715
Ocean freight	$4,000 per 40' container	4,000
Inland frieght	$1000/40' container	1000
cost		35,480
U. S custom duty@ 3.5%	35,480 * 3.5%	1241.8
Unloading	$0.05 *42000 lbs	2100
Total cost for 3,000 cases		38,821.8

Total cost for each case = 38,821.8 / 3000 = $12.94

If we need to reserve 10% profit and 3% of selling price to sales

Profit = $12.94 * 0.10 = $1.294

3% of selling price to sales = $12.94 * 3% = 0.388

Final price of case to sell = $12.94 + $1.294 + $0.388 = $14.622 = $14.62

Working note :

1. Calculation of lbs

Case weight = 14lbs per case

Total 3000 cases weight = 3000 * 14lbs = 42000 lbs

2. Calculation of tonnes

1 ton = 2204.6lbs

For 42000lbs = 42000/2204.6 = 19.05 tonnes