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Let us. say that youare the Purchasing: Manager for Lion King Electronics, a company that manufatures scanners and-other computer peripherals. Your vendor for scanner motors, ABD Industries, is now offering "quantity discounts" in the: form of instant rebates and lower shipping charges as follows: I I I I I I Per motor I Net Price Rebate Shipping I Quanity I '| (PhP) '| | (PhP) | |_ (PhP) | l - 500 motors ' 800 ' None 65 501 - 1,000 motors 800 60 45 1,001 - 2,000 motors 800 90 30 a. Calculate the cost of the motors, including shipping charges, for each category. b. If you usually purchase 400 motors per month-what percent would be saved per motor by ordering 800 every two months? What percent would be saved per motor by ordering 1,200 every three months? d. How much money can be saved in a year by purchaSing the motors every three months instead of every month? 9 Solution and Answer: Shurgurado Lhinesis a dealer of cleaning materials. If it pays PhPl,875 for the vacuum cleaner and sells each at PhP4,499.50. .. a. What is the percent markup based on selling price? b. Shurgurado Lhines decided to give a 1-year Product Replacement Policy amounting to PhP399.50. 'If it pays PhP75.00 to the insurance company for each product replacement "policy sold, what is the percent markup based on selling price of the vaCuum cleaner and policy combination? c. If 6,000 vacuum cleaners are sold in a season and 40% are sold with the insurance policy, how many additional "markup amount," (the gross margin), was made by offering the policy? (1. Continuing with the information from letter c, compare the total markup amount of Shurgurado Lhines on: i. Vacuum cleaners only ii. Combination of vacuum cleaner and policy replacement offer e. As Operations Manager for Shurgurado Lhines, what is your opinion on o'ering such replacement policy considering their effect on the "prot picture" of the business? Solution and