Given the following data on a hardware item stocked by Andreas Wieland's paint store in Copenhagen, should the quantity discount be taken?
\[
D=5,760 \text { units; } S=\$ 25 ; \mathrm{H}=\$ 5 ; \mathrm{P}=\$ 5
\]
Discount price $=\$ 3.75$
Quantity needed to qualify for discount $=5,760$ units
The total cost without the discount is $\$ \square$ (round your response to the nearest whole number).
The total cost with the discount is $\$ \square$ (round your response to the nearest whole number).
Should the quantity discount be taken?
Answer
To answer this question, we need to calculate the total cost without the discount and the total cost with the discount. 1. Total cost without the discount: This can be calculated by multiplying the demand (D) by the selling price (S). So, Total cost without discount = D * S = 5,760 units * $25/unit = $144,000. 2. Total cost with the discount: This can be calculated by multiplying the demand (D) by the discounted price. So, Total cost with discount = D * Discount price = 5,760 units * $3.75/unit = $21,600. Comparing the two costs, the total cost with the discount ($21,600) is significantly less than the total cost without the discount ($144,000). Therefore, the quantity discount should be taken.
Step 1 ：To answer this question, we need to calculate the total cost without the discount and the total cost with the discount. 1. Total cost without the discount: This can be calculated by multiplying the demand (D) by the selling price (S). So, Total cost without discount = D * S = 5,760 units * $25/unit = $144,000. 2. Total cost with the discount: This can be calculated by multiplying the demand (D) by the discounted price. So, Total cost with discount = D * Discount price = 5,760 units * $3.75/unit = $21,600. Comparing the two costs, the total cost with the discount ($21,600) is significantly less than the total cost without the discount ($144,000). Therefore, the quantity discount should be taken.
