A manufacturer offers a 30/25 chaindiscount if the invoice subtotal is above$1,000. If the list price is $80 per item,what is the total price of the first invoicethat activates the chain discount?F4A. $546.00©2003-2022 International Academy of Science. All Rights Reserved.C. $468.00T%5Q SearchF5F66i&F77F88B. $504.00D. $588.00DELLF99.prtscF10homeF11aendF12Insert2+11.

Chain discounts: Chain discounts, sometimes referred to as series discounts, or multiple discounts are a series of Trade discounts applied to the list or catalog price of a product. A business offers trade discounts to avoid having to produce multiple price lists. From a single price list it can offer customers trade discounts for a number of reasons such as making additional purchases, buying in volume or at a particular time of the year, or for purchasing a specific product. For example, a customer might be offered 15% off the list price of a particular product and then a further 5% for purchasing in volume. This chain discount would be written as 15/5.1. Required Number of Items to make the invoice sub total above $1000 = 1000 / 80 =12.5 (Interpretation: we need to buy 12 and half item to make the invoice sub total above $ 1000.) 2. Is it possible ? No, because the list price of each product is $80. And it is not possible to buy the items in pieces. So, We need buy the aticle in full quantity. 3. Hence required number of items to buy to make invoice total above $ 1000 is 13 items. Particulars Amount ($) List price (13 items x 80) 1040 Less: First trade discount at 30% -312 ( 1040 x 30%) Price after first discount 728 Less: Second trade discount at 25% (Chain discount) -182 Price after second discount (Total Price of Invoice) 546 Therefore, the Total Price of Invoice is $ 546

Business

Accounting

A manufacturer offers a 30/25 chain discount if the invoice subtotal is above $1,000. If the list price is $80 per item, what is the total price of the first invoice that activates the chain discount?

A manufacturer offers a 30/25 chain discount if the invoice subtotal is above $1,000. If the list price is $80 per item, what is the total price of the first invoice that activates the chain discount?

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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