Problem

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?

Solution

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.

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Source: https://solvelyapp.com/problems/q99aFgHotU/

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