IDIS 240 Test 2 Evans F2019 with Complete Solutions

IDIS 240 Test 2 Evans F2019 with Complete Solutions List Price Listed price of the product. Manufacturers sell from a nationally advertised price. As there is a fluctuation in cost of raw materials or market condition, a discount is offered, but this discount is seldom reflected on the list price. Selling Price Amount paid by customer that appears on invoice. Selling price = list price - trade discounts Net Price Customer doesn't pay the full price and a cash discount is announced to pay the bill as soon as possible. Net Price = Selling price - Cash discounts Net Sale Actual amount received by the distributor after all adjustments are made to the net price. Net Sale = Net Price - Adjustments Cost of Goods sold (COGS) COGS = cost of merchandise + Freight charges paid by the retailer Freight • Cost to move an item from where it is manufactured to either the distributor's location or the customer's location • Terms of sale specifies who is responsible for payment • Large quantities and Least expensive transportation system - manufacturer pays the freight • Prepay and bill- manufacturer pays the freight but charges for it in the bill Trade Discounts • Specified in "term of sale". • Usually offered by the manufacturer owing to fluctuations in the market conditions like the raw material cost • Trade discounts may be extended further to customers by the distributor to meet local, competitive market conditions Trade Pricing • Pricing methodology that involves simply negotiating the actual price that will be paid as opposed to "list price- trade discounts". • Factors influencing are the same as those influencing trade discounts Cash Discounts • Specified in "term of sale". • Usually offered by the manufacturer to encourage early payments (no difference between cash or check or mode of payment) Special Orders • Usual products with some modification in design, finish, materials or packing • Cancellation charges are usually included in terms of sale. Conditions are clearly stated as to who pays for the order if the order is cancelled. Minimum Order Manufacturer specifies the minimum allowable order as the cost of ordering is high. Distributors collectively buy material from the manufacturer for small orders of various customers. Freight allowed The terms of sale should indicate the amount that must be purchased to have the manufacturer pay the cost of freight for standard shipment. Claims • Terms of sale should indicate the time limit, address of contact to claim for billing or shipping errors. • Damages must be reported clearly specifying the problem before signing the shipment Returns Terms should include information