An SME buys goods priced at P500 per unit. The supplier awards the buyer a 20%...

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An SME buys goods priced at P500 per unit. The supplier awards the buyer a 20% discount on orders of 100 units or more. Furthermore, when the buyer has purchased 1,000 units or more in a calendar year, the supplier awards the buyer a further volume discount of 10% of the list price. The additional volume discount applied to all units acquired during the calendar year. At the beginning of current year, the SME purchased 800 units from the supplier. In the later part of the year, the SME purchased a further 200 units. At year-end, 150 units were unsold. What is the cost of the inventory at year-end? An SME buys goods priced at P500 per unit. The supplier awards the buyer a 20% discount on orders of 100 units or more. Furthermore, when the buyer has purchased 1,000 units or more in a calendar year, the supplier awards the buyer a further volume discount of 10% of the list price. The additional volume discount applied to all units acquired during the calendar year. At the beginning of current year, the SME purchased 800 units from the supplier. In the later part of the year, the SME purchased a further 200 units. At year-end, 150 units were unsold. What is the cost of the inventory at year-end?

Answer rating: 100% (QA)

To calculate the cost of inventory at yearend we need to consider the discounts applied to the purch... View the full answer