Asked by Jacob Rucker on May 27, 2024
Verified
Jasper Company is a wholesaler that buys merchandise in large quantities.Its supplier's catalog indicates a list price of $500 per unit on merchandise Jasper intends to purchase,and offers a 30% trade discount for large quantity purchases.The cost of shipping for the merchandise is $7 per unit.Jasper's total purchase price per unit will be:
A) $507.
B) $350.
C) $357.
D) $343.
E) $493.
Trade Discount
A reduction in the listed price of a product or service, offered by sellers to buyers in the same trade or industry.
Purchase Price
The amount of money paid to buy goods or services.
Shipping Cost
Expenses associated with the transportation of goods from one place to another.
- Discover and understand the components and worth of ending inventory.
Verified Answer
JC
Jonathan CohenJun 02, 2024
Final Answer :
C
Explanation :
The trade discount offered by the supplier is 30%, so Jasper's purchase price per unit after the discount can be calculated as:
List price = $500
Trade discount = 30%
Discount = $500 x 0.30 = $150
Purchase price = $500 - $150 = $350
Adding the cost of shipping per unit, the total purchase price per unit will be:
Purchase price = $350 + $7 = $357
Therefore, the best choice is C.
List price = $500
Trade discount = 30%
Discount = $500 x 0.30 = $150
Purchase price = $500 - $150 = $350
Adding the cost of shipping per unit, the total purchase price per unit will be:
Purchase price = $350 + $7 = $357
Therefore, the best choice is C.
Learning Objectives
- Discover and understand the components and worth of ending inventory.