Question

HNL is looking for new wholesale distributors of living room accent chairs, similar to the one pictured on the right. This chair is a popular item and they can sell it for around $250 each. Below is the pricing, discount, shipping, and invoice terms that HNL has been quoted from two distributors of this chair. Based on the scenarios below, which option is the best deal for HNL, financially? The quality of the chairs is equal from both distributors and HNL has enough stock for now, so the dates of shipment and invoice should not play into the decision. HNL is simply looking for the best deal per chair Option 1: Furniture Plus Option 2: Chair Warehouse For an allotment of 100 blue chevron chairs, Furniture Plus is offering the following For an allotment of 100 blue chevron chairs, Chair Warehouse is offering the following Cost of $8,500 with a 35% trade discount. The $100 freight (FO8 shipping point) is not part of theis not included. Freight charges are HNL's list price Terms are 3/10, n/30 ROG, The invoice date is May 30. HNL would receive the goods on July 18 and pay the invoice on July 20. Cost of $8,000 with an 8/7 chain discount. Freight responsibility, but Chair Warehouse agreed to prepay the $300 freight. Terms are 1/10 EOM. The invoice date is September 29. HNL would pay the invoice on November 7. What would HNL pay Furniture Plus, including cost of freight, for the allotment of chairs? In other words, what is the overall final price? How much would HNL be paying per chair if they choose to buy from Furniture Plus? What would HNL pay Chair Warehouse, including cost of freight, for the allotment of chairs? In other words, what is the overall final price? How much would HNL be paying per chair if they choose to buy from Chair Warehouse? Show your work and answers here Show your work and answers here Page 2 of 3 BUS 115S Business Math Week 7 Indicate which option is the best deal fnancially for HNL here Spio

Answer 1

Allotment of chevron chairs 100

The invoice date is September 29. Haverty’s would pay the invoice on November 7.

Since the payment has taken place within 10 days of invoice, 1/10 discount will kick in

Hence, trade discount = 1% = $ 8000 x 1% = 80

Net price after chain discount of 8/7 = $ 8,000 x (1 - 8%) x (1 - 7%0 = $ 6,844.80

Freight = $ 300

Hence, the overall final price = $ 6,844.80 - $ 80 - $ 300 = $ 6,464.80

And price per chair = $ 6,464.80 / 100 = $ 64.65 / chair