CH 7- Trade Discounts
Net price formula
List price (100% - Trade discount rate)
steps to calculate net price by using the net price factor
1. calculate net price factor, the complement of the trade discount rate 2. calculate net price
net price factor formula
100% - Trade discount rate
net price
The amount a business actually pays for the merchandise after the discount has been deducted
net price factor
The percent of the list price a business pays for merchandise. It is the multiplier used to calculate the net price.
Trade discount rate formula
Trade discount / List price
trade discount formula
Trade discount = List price x Trade discount rate
trade discount
reductions from manufacturer's list price given to businesses that are in the trade for performance of marketing functions