Planning Ahead Inventory is an important part of many businesses. Can you think of problems that might arise from having too much or too little of a product in stock?
Mar 27, 2015
Planning Ahead
Inventory is an important part of many businesses.
Can you think of problems that might arise from having too much or too little of a product in stock?
Lesson Objective
Compute the trade discount, the net price, and the trade-discount rate.
Content Vocabulary
list pricelist price
The price at which a business generally sells an item, also called the catalog price.
list price
The price at which a business generally sells an item, also called the catalog price.
trade discount
trade-discount rate
net price
trade discount
A discount from the list price.
trade discount
A discount from the list price.trade-discount rate
The amount of the discount of an item expressed as a percentage of the list price.
trade-discount rate
The amount of the discount of an item expressed as a percentage of the list price.
net price
The price actually paid for a discounted item.
net price
The price actually paid for a discounted item.
Johnson Auto Repair Shop is purchasing an electronic ignition module for a sport coupe that is six years old. The list price in the wholesaler’s catalogue is $845.
Johnson receives a 40 percent trade discount.
What is the net price of the module?
Example 1Example 1
Find the trade discount.
List Price × Trade-Discount Rate
$845 × 40% = $338.00
Example 1 Answer: Example 1 Answer: Step 1Step 1
Find the net price.
List Price – Trade Discount
$845.00 – $338.00 = $507.00
Example 1 Answer: Example 1 Answer: Step 2Step 2
Murray Plumbing receives an 18 percent trade discount from their wholesale supply company.
The list price on an item that Murray needs to purchase is $145.79.
What is the net price?
Practice 1Practice 1
$119.55
Practice 1 AnswerPractice 1 Answer
Find the trade discount and the net price.
List price: $105.59
Trade-discount rate: 32 percent
Practice 2Practice 2
Trade discount: $33.79
Net price: $71.80
Practice 2 AnswerPractice 2 Answer