Problem Solving (Trade Discounts, Cash Discounts, Markups and Markdowns

Study the following case and answer the questions based on the information provided. Show your work

Discount Electronics buys stereos for $830 get two discount, festive discount of 37.5% and another discount of 12.5% if they buy at least 100 stereos with the conditions on 1 Nov, 2016

215 , n60 with end of the month dating ( E. O. M). They plan to pay invoice after the festive season in the first week of January 2017. They estimated that expenses are 20% of cost and the required profit is 15% of the regular selling price. All merchandise is marked with a price so that the store can advertise a discount of 30% while still maintaining its regular markup. During the annual clearance sale, the new regular selling price of unsold items is marked down 50%.

(1) What is the cost per stereos (ignoring taxes) for Discount Electronics?

(2) What is the selling price required to cover cost, overhead, and desired profits? What is the marked selling price?

(3) If Discount electronics had terms 2/15, n/30 and had paid the invoice within 15 days. How much more discount from the regular sales price can Discount Electronics offer to if they cover overhead and maintain its originally intended profit?

(4) What operating profit or loss does the store make on items sold during the sale?

(a) in dollars?

(b) as a percent of MSRP?