Karen Curry was eager to find seven dozen soft-sided drink coolers for a company

Question

Karen Curry was eager to find seven dozen soft-sided drink coolers for a company promotion. She found a good price, $24 each. However, through Mercata.com a group purchasing website that offers volume discounts to smaller companies who electronically pool their orders, she found a lower price of $21. (a) What was Karen's final total net purchase price? (b) What was her total discount amount using the website? (c) What was the percent discount using the online buying pool? (d) If Karen meets the cash discount period of 2/10 net 30, what would be her final price?

Explanation / Answer

Karen's final purchase price per cooler=$21

Number of coolers=7*12=84

a) So Karen's net purchase price=$84*21=$1764

Discount amount per cooler using the website=$24-21=$3

b) so Karen's total discount on 7dozen coolers= 84*$3=$252

c) Percentage discount using the online buying pool=3/24*100=12.5%

d)2/10 net 30 means there is a discount of 2% offered by the seller to Karen if she pays the invoice of the total amount within 10 days from the invoice date to avail the discount. Net 30 means that if Karen doesn't pay the full invoice amount within 10 days then the net amount (without discount) is due within 30 days after the sales invoice date

Thus a discount of 2% would mean that Karen would have to pay (100-2=)98% of the original amount.

Thus net amount which she would have to pay=$98/100*84*24=$1975.68

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