Suppose a certain car manufacturer's incentive program designed to reduce inventory of certain low-selling models offers a $8,000 extra dealer incentive for each of these vehicles that the dealer moved into its rental or service fleets. As the accountant for a dealership with a number of these vehicles left in stock, your manager has asked you to calculate certain invoice figures. The normal trade discount from this car manufacturer is 17%. If the average sticker price (list price) of these remaining vehicles at your dealership is $26,500, calculate the following. (a) What is the amount of the trade discount, including the incentive (in $)? 24 (b) What is the trade discount rate (in percent)? Round to the nearest tenth of a percent. % (c) What is the net price (invoice price) to your dealership (in $)?
Suppose a certain car manufacturer's incentive program designed to reduce inventory of certain low-selling models offers a $8,000 extra dealer incentive for each of these vehicles that the dealer moved into its rental or service fleets. As the accountant for a dealership with a number of these vehicles left in stock, your manager has asked you to calculate certain invoice figures. The normal trade discount from this car manufacturer is 17%. If the average sticker price (list price) of these remaining vehicles at your dealership is $26,500, calculate the following. (a) What is the amount of the trade discount, including the incentive (in $)? 24 (b) What is the trade discount rate (in percent)? Round to the nearest tenth of a percent. % (c) What is the net price (invoice price) to your dealership (in $)?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Transcribed Image Text:Suppose a certain car manufacturer's incentive program designed to reduce inventory of certain low-selling models offers a $8,000 extra dealer incentive for each of these
vehicles that the dealer moved into its rental or service fleets.
As the accountant for a dealership with a number of these vehicles left in stock, your manager has asked you to calculate certain invoice figures. The normal trade discount
from this car manufacturer is 17%. If the average sticker price (list price) of these remaining vehicles at your dealership is $26,500, calculate the following.
(a) What is the amount of the trade discount, including the incentive (in $)?
%24
(b) What is the trade discount rate (in percent)? Round to the nearest tenth of a percent.
%
(c) What is the net price (invoice price) to your dealership (in $)?
(d) If the cars were then sold from the fleets at $1,000 over "invoice" (net price), what is the total percentage savings to the consumer based on the list price? Round to the
nearest tenth of a percent.
aby
(e) Although these incentive prices reflect extraordinary discounts to the consumer, what other factors should a consumer consider before purchasing a "discontinued" brand
of vehicle? (Select all that apply.)
O total number of vehicles manufactured this year
vehicle will be worth less than comparable models that are not discontinued
cho
O net worth of the car dealership
O availability of parts and service
WEBI
O vehicles may be more difficult to resell
lent c
DOCX
NEWEST RE
80
888
FA
FR
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education