Thanks to visit codestin.com
Credit goes to www.scribd.com

Scribd
Upload
211 views11 pages

DISCOUNT

This document discusses discounts, including trade discounts. It defines a discount as a reduction from the full price. The net price is calculated as the unit price minus the discount amount. Gross sales are calculated by multiplying the selling price by the quantity. A trade discount is a special discount given by suppliers, and is calculated as the trade discount rate multiplied by the selling price. A trade discount series provides multiple tiered discounts based on purchase volume and payment terms. An example shows how to calculate the total trade discount for a series offering 20%, 10%, and 5% discounts.

Uploaded by

Jannette Ramos
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPT, PDF, TXT or read online on Scribd
211 views11 pages

DISCOUNT

This document discusses discounts, including trade discounts. It defines a discount as a reduction from the full price. The net price is calculated as the unit price minus the discount amount. Gross sales are calculated by multiplying the selling price by the quantity. A trade discount is a special discount given by suppliers, and is calculated as the trade discount rate multiplied by the selling price. A trade discount series provides multiple tiered discounts based on purchase volume and payment terms. An example shows how to calculate the total trade discount for a series offering 20%, 10%, and 5% discounts.

Uploaded by

Jannette Ramos
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPT, PDF, TXT or read online on Scribd
You are on page 1/ 11

DISCOUNT

DISCOUNT
• A reduction from the full or standard amount
of a price or value.
• May be obtained by multiplying the unit price
by the discount rate.
• Discount= UP x DR
where: UP- unit price
DR- Discount rate
• Net Price is the difference between the unit
price and the discount
• Net Price = UP - D
• Where: UP- unit price
D- Discount
• GROSS SALES is obtained by multiplying the
selling price by the quantity
• Gross Sales= Selling price x Quantity
Example:
Selling Price of school bag is Php200. each.
Bought 50 pcs. How much is the gross sales?

Php200 X 50pcs = Php1,000.00


SINGLE TRADE DISCOUNT
• incentive or loyalty discount.
• Cash discount
• Volume discount
Trade Discount
• the supplier normally gives a special discount
• This discount is referred to as trade discount.
• TRADE DISCOUNT = TRADE DISCOUNT RATE x
SELLING PRICE
Example
• My regular beef supplier gives me a 5% discount on my
meat purchases every week. If the price of beef brisket
this week is PhP375 per kilo and I am planning to buy 1.5
kilos, how much trade discount will I receive from this
purchase
Total Selling Price = 1.5 x 375 = PhP562.50
Trade Discount = 0.05 x 562.50 = PhP28.13

I will get a total trade discount of PhP28.13 for my 1.5 kg of


beef brisket this week
TRADE DISCOUNT SERIES
• a supplier may want to give its distributor a
discount of 20/10/5.
• To interpret, the supplier may, in addition to
the 20% discount it gives the distributors,
slash another 10% from the resulting
discounted price if the distributor purchases a
set minimum volume of items and another
additional 5% if the purchase is paid in cash.
EXAMPLE
• If a popular shoe brand promotes this
discount of 20/10/5 for a minimum volume of
250 pairs of shoes.
• Assuming that the unit selling price of the
shoes is PhP2,500, compute the trade
discount per pair of shoes that a distributor
avails of under this scheme.
First Trade Discount = 0.20 X 2,500 = PhP500
Initial Discounted Price = 2,500 – 500 =PhP2,000
OR
Initial Discounted Price = (1 – 0.80) x 2,500 = PhP2,000
Second Trade Discount = 0.10 X 2,000 = PhP200
Second Discounted Price = 2,000 – 200 = PhP1,800
OR
Second Discounted Price = (1 – 0.10) x 2,000 = PhP1,800
Last Trade Discount = 0.05 X 1,800 = PhP90
Total Trade Discount = 500 + 200 + 90 = PhP790

The distributor will be able to avail of a total of PhP790 of trade discounts if


he purchases a minimum of 250 pairs of shoes

You might also like