1.6 Review Exercises
- An invoice for $15,000 dated June 16 has terms of [latex]3/15, 2/30, n/45[/latex]. What payment in full is required if the payment is received on July 3?
Click to see Answer
$14,700
- An invoice for $37,650 is dated June 24 with terms of [latex]2/10, 1/30, n/60[/latex]. If a payment of $20,000 is made on July 2 and another payment of $10,000 is made on July 23, what is the balance remaining on the invoice?
Click to see Answer
$7,140.83
- What amount must be remitted if invoices dated January 25 for $1,700, February 1 for $1,800, and February 15 for $900, all with terms of [latex]3/25, n/50[/latex] are paid with the same cheque on March 12? Assume it is a non–leap year.
Click to see Answer
$4,427.84
- An invoice for $13,398.25 dated August 27 with terms of [latex]5/10, 2/25, n/45[/latex] was partially paid on September 7. If the invoice balance was reduced to $2,598.25, what was the amount of the payment?
Click to see Answer
$10,584
- An invoice for $147,477.77 dated July 26 with terms of [latex]5/15, 3.5/25, 2/40, n/60[/latex] was partially paid with two equal payments on August 10 and September 4, reducing the balance owing to $76,579.81. What amount was paid on each of the two dates?
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$34,200
- The Gap is purchasing an Eminem graphic T-shirt for its stores. If the list price for the T-shirt is $34.50 and the Gap can receive a 40% trade discount, what net price will the Gap pay?
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$20.70
- Nike has been approached by a retailer who wants to carry their Shox brand. The retailer needs a trade discount of 30% and its wholesaler needs 15%. The retailer also wants a 5% quantity discount. If the list price for the shoes is $195.00, what is the wholesale (net) price that Nike will charge?
Click to see Answer
$110.22
- If the regular price of a product is $775.00 and it is eligible to receive discounts of 14%, 8%, and 5%, what single discount percentage is equal to the multiple discount percentages? Show calculations that show how the single and multiple discounts produce the same net price.
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24.84%, $582.52
- Subway wants to price a new 12 inch sandwich. The cost of all the ingredients is $1.23. Expenses are 200% of cost, and Subway wants to earn a profit of 187% of cost. What is the regular selling price of the new sandwich?
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$5.99
- If the cost of a Bose Wave music system is $27.82 and the list price is $49.99, determine the markup amount. Express the markup both as the rate of markup on cost and the rate of markup on selling price.
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$22.17, 79.69%, 44.35%
- Rogers Communications is thinking about having a special promotion on its Digital One Rate 250 Plan, which offers 250 minutes of cellular calling. If the current price is $85.00 per month and Rogers wants to put it on special for $75.00 per month, what is the rate of markdown?
Click to see Answer
11.76%
- An iMac has a list price of $774.99 with available trade discounts of 20% to the retailer and an additional 15% to the wholesaler.
- What price should a retailer pay for the product? What is the dollar value of the discount?
- What price should a wholesaler pay for the product? How much less than the retailer’s price is this?
- Overall, what single discount percent does the wholesaler receive?
Click to see Answer
a. $619.99, $155; b. $526.99, $93 less; c. 32%
- The marketing manager for Tim Hortons is attempting to price a cup of coffee. She knows that the cost of the coffee is $0.14 per cup, and expenses are 30% of the regular selling price. She would like the coffee to achieve an 88.24% markup on selling price.
- What is the regular selling price for a cup of coffee?
- What is the profit per cup?
- What is the rate of markup on cost?
Click to see Answer
a. $1.19; b. $0.69; c. 750%
- Jonathan needs a new business suit for a presentation in his communications course. He heads to Moores and finds a suit on sale for 33% off. The regular price of the suit is $199.50.
- What is the sale price?
- What is the dollar amount of the markdown?
Click to see Answer
a. $133.67; b. $65.83
- Birchwood Honda needs to clear out its Honda generators for an end-of-season sale. If the dealership pays $319.00, has expenses of 15% of cost, and profits of 30% of the regular unit selling price, what rate of markdown can the dealership advertise if it wants to break even during the sale?
Click to see Answer
30%
- A retailer purchasing the Halo 3 video game is eligible to receive a trade discount, quantity discount, and loyalty discount. If the net price of the game is $22.94, the list price is $39.99, the trade discount is 25%, and the quantity discount is 15%, what percentage is the loyalty discount?
Click to see Answer
10.02%
- Indigo is stocking a new hardcover book. The book has a cover price of $44.99 and Indigo is eligible to receive discounts of 25%, 8%, 4%, and 1%. Expenses are 20% of cost. The book sells for the cover price.
- What is the profit per book?
- Some new books are launched at 30% off the cover price. From a strictly financial perspective, would it be wise for Indigo to use this approach for this book? Why or why not?
Click to see Answer
a. $9.59; b. -$3.91
- Mary is shopping for a new George Foreman grill. While shopping at Polo Park Shopping Centre, she came across the following offers at three different retail stores:
- Offer #1: Regular price $149.99, on sale for 30% off.
- Offer #2: Regular price $169.99, on sale for 15% off plus an additional 30% off.
- Offer #3: Regular price $144.95, on sale for 10% off plus an additional 15% off. Mary also gets a 5% loyalty discount at this store.
Which is the best offer for Mary?
Click to see Answer
Offer #2 has lowest price of $101.14
Attribution
“Chapter 6 & 7 Summary” from Business Math: A Step-by-Step Handbook (2021B) by J. Olivier and Lyryx Learning Inc. through a Creative Commons Attribution-NonCommercial-ShareAlike 4.0 International License unless otherwise noted.
