Trade Discount & Discount Series

Question 1

The amount which is reduced from the retail price of a product by a manufacturer

Answer 1

Trade Discount

Question 2

Discount Triangle Formula

Answer 2

Trade Discount = OG Price x Discount Rate

OG Price = Trade Discount / Discount Rate

Discount Rate = Trade Discount / OG Price

Question 3

Calculating Net Price (Complement Method)

Answer 3

Net Price = OG Price - OG Price (Discount Rate)

or

Net Price = OG Price x (1 - Discount Rate)

Question 4

Calculating the Trade Discount Rate

Answer 4

Trade Discount Rate = Trade Discount / OG Price

or

Trade Discount Rate = (OG Price - Net Price) / OG Price

Question 5

What are the two ways to solve for Discount Series?

Answer 5

Applying Discount Rates and Using Single Discount Rate

Question 6

Applying Discount Rate Formula

Answer 6

= OG Price - (OG Price x Discount Rate)

Question 7

Single Discount Rate Formula

Answer 7

= 1 - (1 - Discount Rate 1) (1 - Discount Rate 2)…

Question 8

Additional discounts that are deducted one after another from the price list

Answer 8

Trade Discount Series

Question 9

Another name for Trade Discount Series

Answer 9

Chain Discount

Question 10

Reasons to use Discount Series

Answer 10

1. To encourage volume purchases of item
2. To promote special or seasonal items
3. To entice a new client