Question
As the Purchasing Agent, you need to purchase 50 cases of canned peaches for next month. Your supplier is doing a special promotion this month
As the Purchasing Agent, you need to purchase 50 cases of canned peaches for next month. Your supplier is doing a special promotion this month on the product, and he informs you that if you agree to purchase a minimum of 70 cases, he can offer you a case at the price of $12.35, instead of the regular price of $16.77. You also have a manufactures rebate coupon for $0.50 per case if you purchase the case at the regular price.
Based on the supplier-vendor contract that you have established with the supplier, you know that you can also take advantage of the Prompt Payment Discount agreement, and get an additional 5.5% discount if you pay within 5 days.
| Question | Answer | |
| 1. | What is the total cost if you purchased based on the Special Promotion requirements? Include Prompt Payment Discount. |
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| 2. | What is the total cost if you purchased based on the Rebate coupon requirements? Include Prompt Payment Discount. |
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| 3. | Which method offers the best savings? a. Special Promotion b. Rebate Coupon |
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| 4. | What are some additional factors to consider before you make the final decision?
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Financial and Managerial Accounting
Authors: Horngren, Harrison, Oliver
3rd Edition
978-0132497992, 132913771, 132497972, 132497999, 9780132913775, 978-0132497978
