School Division Office – Pangasinan I

Malasiqui Agno Valley College

Bonifacio St., Malasiqui, Pangasinan
 Business
Mathematics

Single Trade Discount

Learning Objectives

At the end of the lesson, you should be able to:

1. Understand the flow of supply chain

2. Define Trade Discount
3. Illustrate how to compute single trade discounts

CTTO of the content used in the Presentation

Essebtial Question

How to compute for a single trade

discount and what is this for?

CTTO of the content used in the Presentation

 Let say you own a retail
store that sells branded
rubber shoes.

Have you ever wondered

about the process how the
shoes go through before it
reached your store?

CTTO of the content used in the Presentation

CTTO of the content used in the Presentation
TRADE DISCOUNT

❑ List price reductions that a business may offer to

its business customers

❑ Typically offered between manufacturer and

wholesaler or between wholesaler and retailer

❑ Usually occur when a purchaser meet certain

condition to qualify, and it is a reduction in cost
from the normal retail price on goods

CTTO of the content used in the Presentation

 A certain distributor of a branded rubber
shoes provides a 15 % discount to its
wholesaler who purchased 1,500 pieces of
rubber shoes in a month. Instead of paying
Php 4,500,000, the wholesaler will just pay
Php 3, 825,000 because of the given
discount.

CTTO of the content used in the Presentation

 Percentage of the
Trade Discount Rate discount

Price of the product

List Price without discount

Actual price a customer

Net Price pays after deducting any
trade discount
CTTO of the content used in the Presentation
Computation for TRADE DISCOUNT

Useful to find the net price and actual amount of

trade discount

CTTO of the content used in the Presentation

Computation for TRADE DISCOUNT

Useful to find the net price

CTTO of the content used in the Presentation

 Find the net price of shirt listed at Php
925. The retailer is granted a 20 % trade
discount.

DISCOUNT METHOD COMPLEMENT METHOD

LP = 925 LP = 925
TDR = 20% = 0.20 TDR = 20 % = 0.20
Trade discount = LP x TDR CDR = 100% - 20%
= (925)(0.20) CDR = 80% = 0.80
Net Price = LP – TD NET PRICE = LP x CR
= 925 – 185 = (925) (0.80)
=740 = 740
CTTO of the content used in the Presentation
 A manufacturer can cover its cost and make a
reasonable profit if it sells its product for P 350. At
what price should the product be listed so that a
discount of 35 % can be allowed

NP = 350
350 = (LP) (0.65)
TDR = 35% = 0.35
350 = 0.65LP
Complement rate
350 = 0.65LP/ 0.65
= 1 – 0.35
LP = 538.46
= 0.65
 A dining table is listed in a wholesaler’s catalog at Php
4, 210. The dining table is sold to a retailer for a net
price of Php 3, 800. What trade discount rate was
given?

Given: LP = 4, 210 NP = 3,800 Step 2: TD = LP x TDR

Step 1 NP = LP – TD 410 = (4,210) (TDR)
3,800 = 4,210 – TD 410/4,210 =
TD = 4,210 – 3,800 4,210TDR/4,210
TD = 410 TDR = 0.0974 = 9.74%

CTTO of the content used in the Presentation

LIST PRICE TRADE TRADE NET PRICE
DISCOUNT DISCOUNT (NP)
RATE (TDR) (TD)

25, 600 12% ? ?

7, 250 ? 675 ?

CTTO of the content used in the Presentation

LIST PRICE TRADE TRADE NET PRICE
DISCOUNT DISCOUNT (NP)
RATE (TDR) (TD)

25, 600 12% 3, 072 22, 528

7, 250 9.31% 675 6, 575

CTTO of the content used in the Presentation

Discount = 25,600 x 12% NP = 7, 250 – 675
= 3,072 = 6, 575

NP = 25,600 – 3,072 675 = (7,250)(TDR)

= 22, 528 675/7,250 = 7,250TDR/7,250
TDR = 0.0931 = 9.31%
 A 17.5 % discount on a headphone amounts to P 560.
What is the list price?

Checking:
Discount 560
List Price 3,200
Divided by 17.5%
Multiply by 17.5
List Price 3,200
Discount 560

CTTO of the content used in the Presentation

See you next
week!
Thank you!