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1. The markup on a new diamond ring should be 25% based on selling price. If the

ID: 2653608 • Letter: 1

Question

1. The markup on a new diamond ring should be 25% based on selling price. If the seller paid $4,525.00 for one, then how much should it be sold for to achieve the desired markup?

$6,033.33

$4,550.00

$5,756.25

$5,000.00

2. What information does the following term or section of an invoice provide? "Shipped Via"

Name of freight company handling the shipment

Total amount of merchandise and all other charges

Used in quoting shipping charges

Price for each unit of merchandise

3. Screws and Bolts Outlet buys a shipment of screws with a list price of $2400. If the supplier extends trade discounts of 20/25/10, what is the trade discount amount?

$480

$1440

$1920

$1104

a.

$6,033.33

b.

$4,550.00

c.

$5,756.25

d.

$5,000.00

Explanation / Answer

Question 1 Cost price 4525.00 Mark up (25/75 x 4525) 1508.33 Sale price 6033.33 Answer: 6033.33 Question 2 Answer: a. Name of freight company handling the shipment Question 3 This is a series discount Discounted Price = (1-0.20) x (1-0.25) x (1-0.10) 1296 List Price 2400 Discount (List price - Discounted Price) 1104 Answer: $1,104.