On April 8, 2014, Leon’s Kitchen Hut bought a set of pots with a $132 list price
ID: 2714723 • Letter: O
Question
On April 8, 2014, Leon’s Kitchen Hut bought a set of pots with a $132 list price from Lambert Manufacturing. Leon’s receives a 30% trade discount. Terms of the sale were 2/10, n/30. On April 14, Leon’s sent a check to Lambert for the pots. Leon’s expenses are 11% of the selling price. Leon’s must also make a profit of 13% of the selling price. A competitor marked down the same set of pots 10%. Assume Leon’s reduces its selling price by 25%.
On April 8, 2014, Leon’s Kitchen Hut bought a set of pots with a $132 list price from Lambert Manufacturing. Leon’s receives a 30% trade discount. Terms of the sale were 2/10, n/30. On April 14, Leon’s sent a check to Lambert for the pots. Leon’s expenses are 11% of the selling price. Leon’s must also make a profit of 13% of the selling price. A competitor marked down the same set of pots 10%. Assume Leon’s reduces its selling price by 25%.
Explanation / Answer
Answer : Calculation of sale price
Cost of pots
List Price 132.00
Trade Discount @30% of list price 39.60
------------
Cost of Pots 92.40
Less : Cash discount as per term @2% 1.85
-------------------
Net cost of Pots 90.55
-------------------------
Expenses & profit covered fromsale of pots = 11% +13% = 24%
Sale Price will be (100-24 = 76) = 90.55/76%
Sale price = 119.14
Discount on sale price 25% (119.14*25%) = 29.79
------------------
Sale Price after discount 89.35
-------------------
Related Questions
drjack9650@gmail.com
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.