Ch 6 Mathematics of Buying

1
Ch 6 - Mathematics of Buying

• Invoices and Trade Discounts

2
Objectives

• Complete an invoice.
• Understand common shipping terms.
• Identify invoice abbreviations.
• Calculate trade discounts and understand why they
  are given.
• Differentiate between single and series
  discounts.
• Calculate each series discount separately.
• Use complements to calculate series discounts.
• Use a table to find the net cost equivalent of
  series discounts.

3
Invoice

• Printed record of a purchase and sale.
• Seller Sales invoice
• Buyer Purchase Invoice

4
Invoices
5
Invoices

• Note Trade and cash discounts are never applied
  to shipping and insurance charges.

6
Terms

• FOB
• ____________
• FOB shipping point
• Ownership
• Shipping Charges
• FOB destination
• Ownership
• Shipping Charges

7
Terms

• COD
• __________
• FAS
• __________

8
Additional Terms pages 223 224

• ea.
• doz.
• gro.
• gr gro.
• bbl.
• pr.
• cwt.

9
Trade Discounts

• Seller
• manufactures products to be sold by a business
• sell items to be resold by a business

10
Trade Discounts

• Net Cost List Price Trade Discount

List Price 23.75
Trade Discount 45
Net Cost 13.06
11
Trade Discount

• Compute the net cost.
• List price of a Sharp EL-531W calculator is
  18.99.
• Trade Discount is 35.

12
Series Discounts

• Sometimes multiple discounts are offered.
• Series or chain discount
• 15/5 means

13
Compute Series Discounts 1 of 2

• Method 1 Compute each discount separately.

List Price 89.95 Series Discount of
15/5 Net Cost (price) ______
14
Compute Series Discounts 2 of 2

• Method 1 Compute each discount separately.

List Price 548.75 per gr. Series Discount of
20/10 Net Cost (price) per item ______
15
Computing with Complements 1 of 2
100
15
85
List Price Trade Discount Net Cost
List Price 682.09 Trade Discount 15 Net Cost
______
16
Computing with Complements 2 of 2
100
25
??
List Price Trade Discount Net Cost
List Price 185.65 Trade Discount 25 Net Cost
______
17
Series Discount w/ Complements 1 of 3

• Determine the net cost.
• List Price 28.99
• Series discount 25/10
• Net Cost Equivalent __________
• Net Cost __________

18
Series Discount w/ Complements 2 of 3

• Determine the net cost.
• List Price 2595
• Series discount 15/10/5
• Net Cost Equivalent __________
• Net Cost __________

19
Series Discount w/ Complements 3 of 3

• Determine the net cost.
• List Price 230.50
• Series discount 20/15/10
• Net Cost Equivalent __________
• Net Cost __________

20
Use a table to find net cost equivalent of a
series discount
35/20/15
20/10
25/25/5
21
Textbook Problems

• Pages 229-232
• Invoice 1-7
• 37 39
• 49
• 64