Lesson 4.2: Gross Margin, Trade Discount and Discount Series Flashcards
makes use of our basic percentage problem
formula P=BR, where the base (B) is the list price, the rate (R) is the discount
rate, and the percentage (P) is the discount.
computing for discounts
discount formula
discount = list price x discount rate
how much the seller buys the item.
Cost of goods sold / cost of sales
a type of discount in which several discounts are given at
different times and different conditions. These are given to customers in
order to encourage them to purchase in volume.
discount series
the fee for a service or product before discounts are reduced or
sales are added
list price
sales minus the cost of goods sold or
cost of sales.
margin
margin is also known as
gross margin
the amount by which the cost of a product is increased in order
to derive the selling price.
mark-up
the final charge you pay for a product or service after discounts
and sales taxes are computed.
net price
the account used to report the selling price of the merchandise.
sales
a reduction from list price granted to buyers. It is the
amount by which the retail price of a product is reduced by the
manufacturer when it is sold to the reseller or customer.
trade discount
a trade discount could be either a
single or series of discounts
Manufacturers and distributors give retailers trade discounts as
incentives for a sale
Discounts are usually established by
discount rates in percent or decimal form
additional discounts that are deducted one after another from the list price
discount series
trade discount series, chain discounts, successive discounts
