Question

A buyer places an order for the following items. The merchandise cost is list price less a trade discount of 30% and 15%. Calculate the cost to be paid for the entire purchase order. units list Item purchas ed cost sweaters $35.00 skirts $25.00 jackets 36 $75.00 72 48 An invoice for men's wallets is dated February 7 with terms of 8/10, net 30. The total billed cost of the merchandise is $12,000.00 How much should be paid if the invoice is paid on February 14? A buyer for scarves orders merchandise with terms of 6/10, net 30. The total billed cost of the merchandise is $8,000.00 The invoice arrives dated January 5 with FOB store. There are freight charges of $300.00. How much should be paid if the invoice is paid on January 20? Define markup and how it is calculated:

Answer 1

From the information given above, I have answered the first 4 questions.

1 The Merchandise cost is list price less a trade discount of 30% and 15% Calculation of cost to be paid for the entire purchase order List Cost Less: first discount 30% of list cost Total 135 40.5 Items Sweaters Skirts Jackets 35 25 75 10.5 7.5 22.5 (35*30%) (25*30%) (75*30%) 24.5 17.5 52.5 3.7 2.6 7.9 (24.5*15%) (17.5*15%) (52.5*15%) 20.8 14.9 44.6 72 48 36 1499.4 1606.5 List cost less first discount Less: second discount 15% 94.5 14.2 13 14 80.3 15 Net Price Units Purchased Cost to be paid 156 16 714 3819.9 17 18 Total cost to be paid for the entire purchase order is $3819.9

3 2 An invoice for men's wallet is dated 7, February with terms of 8/10, net 30. Total billed cost $12,000 Invoice is paid on 14, February 4 Define markup Markup is the amount of profit added to the cost of goods sold as a percentage of cost or percentage of selling price. Example: 15% on unit cost of 120 or 10% on selling price. 8/10, net 30 means if the bill is paid within 10 days 8% discount is provided, otherwise the entire amount is payable within 30 days Invoice is dated on 7, feb and the payment is made on 14. feb, which is paid within 10 days hence a discount of 8% id provided 9 Mark up is calculated as mark up = unit cost * markup percentage example 1: 15% on unit cost of 120 unit cost =120 mark up = unit cost * markup percentage 120*15% 18 12 Total billed cost Less: Discount of 8% Total amount paid 12000 960 11040 15 2. 10% on selling price where unit cost is 120 unit cost 120 90% Mark up 10% sellin price 100% A buyer for scarves orders merchandise with terms of 6/10, net 30 Total billed cost $8,000 Invoice arrives dated 5 January with FOB store. There are freight charges of $300. Invoice is paid on 20, January 19 therefore, markup is (120*10%)/90% 13.3 6/10, net 30 means if the bill is paid within 10 days 6% discount is provided, otherwise the entire amount is payable within 30 days Invoice is dated on 5, Jan and the payment is made on 20, Jan which is paid after the discount period of 10 days, hence the total billed amount of $8000 has to be paid. 24 25 26 Total amount to be paid is $8,000 22