Page 118 - CalcBus_Flipbook

13-4 Merchandising CH 13]

Without % key:

Solution: Cl/C .13 + .09 + .08 M+ 1 − MR

MC M+ 800 X MR = 560 —> means $560

Series of Discounts. Two or more discounts given together are termed series
discounts or also termed a chain discount. A series discount is a discount provided
Series Discounts in through a combination of conditions. In such transactions, the seller extends different
Accounting. Series discounts once certain conditions are met. For example, a line of goods that was formerly
discounts, discounted at 15% is now discounted at 15% and 10% as a series. These series discounts
sometimes referred are calculated on a decreasing basis. The list price is multiplied by the first discount rate
to as chain with the resulting amount being subtracted, and then the second discount is applied to the
discounts, or
multiple discounts new balance, reducing the price again when subtracted from its base. This remainder may
are a series of trade also be discounted yet again, by a third discount reducing the total actual price the retailer
discounts applied pays.
to the list or catalog Assume the seller extends a new sale promotion discount of an additional 10%, and a
price of a product. A bulk purchases discount to the already 15% and 10% series discount price. The bulk
business offers purchase discount (100 items or more) will be 20% on the same item. Thus if the buyer
trade discounts to purchases only 80 items he will only get the 10% promotion discount. However, if he
avoid having to
produce multiple purchases 120 items, he will then take advantage of the additional bulk 20% discount and
price lists not the 10% new sale promotion discount.
Example A: Calculate the net price of merchandise listed at $12,000 less trade

discounts of 15%, 10% and 10% on an 80 item purchase.
Solution algorithm 1:
$12,000.00 list price
− 1,800.00 first discount (= 15% of $12,000.00; also 0.15 x $12,000)
$10,200.00 remainder (=85% of $12,000: = also 0.85 x $12,000)
− 1,020.00 second discount (10% of $10,200 = 0.10 x $10,200)
$9,180.00 remainder (=90% of $10,200; also = 0.90 x $10,200)
− 918.00 third discount (10% of $9,180 = 0.10 x $9,180 )
$8,262.00 net price (=90% of $9,180; also = 90% x $9,180)

With your hand held calculator and using the % key:

Solution: Cl/C 12000 − 15 % − 10 % − 10 % —> 8262

—> means $8,262
Without % key:

Solution: Cl/C 12000 M+ X .15 M- MR X .1 M-

MR X .1 M- MR —> 8262 —> means $8,262

The discount in Example A above is on a successively lower base that begins with
$12,000, then on $10,20, and lastly on $9,180.

The complement of a decimal fraction is the amount that may be added to the decimal
to make a sum of 1. As such, 0.85 is the complement of 0.15 (0.85 + 0.15 = 1.0); 0.25 is the
complement of 0.75; and 0.037 is the complement of 0.963. Therefore, the complement of
any percent may be found by subtracting the given percent from 100%; that is, the
complement of 25% is 75%. Notice how the complements of the discount rates are used to
solve the problem in Example A above and in Solution algorithm 2 below.

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