SUBJECT: BUSINESS MATHEMATIC

QUESTION 1

A dealer receives an invoice from a wholesaler for the purchase of 100 shirts and 300 shorts. The invoice for 1,000 (including a delivery cost of 60 and an insurance charge of 40) is dated 21 2019. It offers trade discounts of 20 % and 12 % and cash discount terms of 3/10, 2/20, /60. The dealer pays the invoice on 1 2019.

a) If the unit price of the shirts (before discount) is three times that of the shorts, calculate the unit price of the shirts and shorts offered by the wholesaler. (4 marks)

b) The dealer wants a net profit of 10 % on the sale of all the shirts and shorts. If the estimated operating expenses amount to 20 % of the cost, what is the expected revenue from the sale of all the shirts and shorts? (3 marks)

c) Assume that sales are rather slow at the above selling prices. Therefore, he offers a discount but still enjoys a gross profit of 20 % on cost. Determine the discount rate that is offered. (3 marks)