QRB/501 Version 4 / 1
Week 2 Study Guide: Markup, Markdown, Trade and Cash Discounts
Readings and Key Terms
· Ch. 8 of Business Math
o Suggested retail price, catalog price, list price
o Trade discount
o Net price
o Discount rate
o Complement of a percent
o Net price rate
o Trade discount series (chain discount)
o Net decimal equivalent
o Single discount equivalent
o Cash discount
o Net amount
o End-of-month (EOM) terms
o Receipt-of-goods (ROG) terms
o Partial payment
o Partial cash discount
o Amount credited
o Outstanding balance
· Ch. 9 of Business Math
o Cost
o Selling price (retail price)
o Markup (gross profit or gross margin)
o Net profit
o Markdown
o Perishable
Content Overview
· Single trade discounts
o Find the trade discount using a single trade discount rate; find the net price using the trade discount.
o Find the net price using the complement of the single trade discount rate.
· Trade discount series
o Find the net price applying a trade discount series and using the net decimal equivalent.
o Find the trade discount, applying a trade discount series and using the single discount equivalent.
· Cash discounts and sales terms
o Find the cash discount and the net amount using ordinary dating terms.
o Interpret and apply end-of-month (EOM) terms.
o Interpret and apply receipt-of-goods (ROG) terms.
o Find the amount credited and the outstanding balance from partial payments.
o Interpret freight terms.
· Markup based on cost
o Find the cost, markup, or selling price when any two of the three are known.
o Find the cost, markup, selling price, or percent of markup when the percent of markup is based on the cost.
· Markup based on selling price and markup comparisons
o Find the cost, markup, selling price, or percent of markup when the percent of markup is based on the selling price.
o Compare the markup based on the cost with the markup based on the selling price.
· Markdown, series of markdowns, and perishables
o Find the amount of markdown, the reduced (new) price, and the percent of markdown.
o Find the final selling price for a series of markups and markdowns.
o Find the selling price for a desired profit on perishable and seasonal goods.
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