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and RATE
PERCENTAGE- refers to the calculations in which hundredths are used as a basis for
comparison.
- the amount that is a part of the base and is expressed in the same unit of
measure as the base.
- usually followed by is
BASE- the whole amount to which the relationships of the other amounts are compared.
- usually follows of
RATE- indicates the relationship of the part to the base. (%)
P=BxR
a:b
or
a/b
extremes
a:b=c:d
means
or
a/b = c/d
CHAPTER 2
- an amount of the net price that is deduction from the net price if
bill is paid on or before a specified time period.
TRADE DISCOUNTS
REASONS WHY THEY GIVE TRADE DISCOUNTS:
a. Adjust list price to prevailing market prices.
b. Secure the trade of desirable customers
c. Attract retailers to buy in large quantities
CASH DISCOUNT
- An amount or a percentage of the net price that is deducted from the net price
if the bill is paid on or before a specified time period called the discount
period.
e.o.m.-
end of month
r.o.g.-
discount period begins upon the receipt of the goods by the buyer.
c.o.d.-
cash on delivery. Payment would have to be made upon delivery of the goods.
* If the invoice is dated late in the month such as 26th to 31st, and marked 15 e.o.m., the
discount period extends to the 15th day of the second upcoming month.
CHAPTER 3
PRICING THE MERCHANDISE
GROSS PROFIT- is made up of the overhead or operating expenses and the net profit.
NET PROFIT- is the amount of money the retailer wants to keep for the business.
MARK-UP
X 100%
COST
MARK-UP RATE=
MARK-UP
X 100%
SELLING PRICE