‘

Business, to be successful,
must be based on science, for
demand and supply are matters
of mathematics, not

- Elbert guesswork.

Hubbard
MICHAEL R. DE LEON, SPST-
I
 Calculating the Discount
and Net
Amount Price
Assignment 1:

The distributor of Nikita power tools is offering a

trade discount of 38% to hardware stores. What will
be the amount the stores pay to purchase a rotary
saw listed at PHP27,100?
 Calculating the List Price
Assignment 2:

The net price of a product after a trade discount of

15% is PHP845.75. Compute for the list price and
the amount of the trade discount.
‘ Discount
series
MICHAEL R. DE LEON, SPST-
I
 Discount series
• Also known as multiple discount or series
discounts.
• In addition to the basic trade discount offered to
all customers, the seller might also offer small
discounts for large volume purchases, for special
promotions, and for early orders of seasonal
items.
 Discount series
• If a purchaser qualifies for more than one
discount, the understanding is that the discounts
should be compounded rather than added.
 Discount series
• For example: Suppose there are discounts, then the
general formula in computing the net price after
discounts is:

where, = list price

= first discount rate in decimal
= second discount rate in decimal
= third discount rate in decimal
= th discount rate in decimal
 Example 1:
A retailer is offered a regular discount of 25%, a further
discount of 7.5% if she places an order exceeding
PHP10,000 (at list prices), and another 5% discount for
participating in a joint promotion with the distributor.
a. If the retailer is eligible for all three discounts, what
will be the net price of an order totaling PHP11,500?
b. What is the total discount amount of the saving from
the quantity discount (assuming that she does not
participate in the joint promotion)?
 Example 2:
WGW Manufacturing and Ace Clothing both produce
basic work shirts that are similar in quality and popularity.
Both manufacturers quote a list price of PHP150 for the
shirt. WGW offers a regular trade discount of 25% plus
additional volume discount of 10% on orders of at least
1,000 shirts. Ace offers a standard discount of 30% and a
further 5% discount on orders exceeding 500 shirts.
Which source will give the lower net price on an order for
1,000 shirts?
 Example 3:
A manufacturer of mountain bikes sells through
distributors in some regions of the country, through
wholesalers in other regions, and directly to retailers in its
home province. The manufacturer gives 25% trade
discount to retailers, an additional 10% discount to
wholesalers, and a further 7.5% discount to distributors.
What net price does the manufacturer receive from each
buying level on a mountain bike listed at PHP12,500?