MISCELLANEOUS PROBLEMS IN DISCOUNT

1. I have an invoice for $369.43, subject to trade discount of 5%, and a regular discount of 6/10, 5/30. For how much shall I draw my check if the invoice is paid within the 10 days?

2. I bought goods at 10%, 15%, and 5% off. If the discounts amounted to $95.631, what was paid for the goods?

3. A merchant bought a lot of cloth at 30¢ per yard. What must the goods be marked in order that he may throw off 25% from the marked price, and still make 25% profit?

4. If I sell an article at an advance of 25% on the cost, and then discount the bill 5% for cash payments, find the cost if my net gain is $63.75.

5. A certain automobile costs $1000. What must be the catalogue price in order to allow the agent 25% for selling and for service?

6. I bought 30 flat top desks at $14.50 each; 16 typewriter desks (sanitary) at $22.50 each; and 24 low roll sanitary 55 inch desks at $42.50 each. If these prices represent a discount of 40% from the list price, what is the list price of each kind of desk? If I receive a further discount of 3% for cash, what is the cost to me?

7. By marking suits at $30 each, a tailor sold 15 per day. Could he afford to reduce the price to $25 each if by so doing the sales increased to 28 a day, the cost per suit being $17.50? What per cent would his profits be increased or decreased each day?

8. Chairs cost $45 a dozen less 20% and 15%. At what price should they retail to gain 30%?

9. I bought goods for $400 less 20%, 10%, and 3%. I sold them for $600 less 40% and 10%. Find my gain or loss per cent.

10. A bill for $10,000 is due in 60 days with 5% discount on any part of it paid within 30 days. If $4000 is paid within 30 days, what is the balance due at the expiration of the 60 days?

11. A merchant invested $15,000 in stock. After selling $12,000 worth he took an inventory and found the stock on hand was worth $9000. What was his average rate of gain on the goods sold?

12. Bought 10 teachers' desks at $17.50; 5 principals' desks at $43.75; 5 filing cases at $28.50; 10 bookcases at $22.75. Discounts: 15%, 10%, 5%. Find the cost of the entire lot.

13. Find the net amount of the following:

12 bu. alfalfa seed at $11

15 bu. potatoes (early) at $1.30

3 cans of Inoculation at 75¢

10 bu. seed corn at $2.50

Discounts 5%, 3%, 2%.

14. A piano listed at $600 is sold subject to discounts of 40%, 15%, 10%. Find the net price.

15. The fare from Cleveland to Buffalo one way is $5. The round trip is $9. What is the rate of discount on the round trip?

16. Which is the better for the purchaser, and how much per cent, a series of 40%, 25%, and 10%, or a single discount of 60%?

DRILL IN FUNDAMENTALS

Copy from sight, multiply, and check. Find products as in § 64.

MISCELLANEOUS WORK

1. A certain grade of German silver contains 25.8% nickel. How much German silver can be made by using 5680 lb. of nickel?

2. If 84% of butter is butter fat, how much butter can be made from 1240 lb. of butter fat?

3. The dressed weight of a steer is 62% of the live weight. What must be the live weight to make the dressed weight 950 lb.?

4. If a family pays in rent 20% of their total expenditure, what is their total yearly expenditure if they pay $65 a month for rent?

5. In a certain city it was found by the last census that 21.4% of the population was of school age. The present school census gives 128,462 of school age. At this rate what is the present population?

6. A merchant finds that by selling a certain article at profit of 40% he can sell about 25,000, at a profit of 30% he can sell 35,000, at a profit of 20% he can sell 45,000, and at a profit of 10%, 60,000. Which of these rates of profits will yield him the greatest total profit ?

7. A company invested $35,000 in goods, sold $45,000 worth and inventoried the balance for $15,000. Find the average rate of gain. on the goods sold.

8. What single discount is equivalent to a discount series of 40%, 25%, 10%, and 5%?

9. Which is the better offer for the seller, and how much, trade discounts of 20%, 10%, and 3%, on a bill of $750, or a single discount of 30%?

10. A consignment of goods from France was invoiced at 9800 francs. Total charges were 1240 francs. Part of this consignment was 25 dozen gloves invoiced at 50 francs per dozen. What part of the charges should be borne by the gloves?

11. At the beginning of a year a merchant had goods in stock as per inventory, $14,860. During the year he bought goods for $87,250, and paid $8750 freight and cartage. He sold goods for $108,650, and his inventory at the end of the year showed goods on hand to the amount of $21,340. What was his average rate of gross profit?

CHAPTER XXIII

NET PROFITS. COST OF DOING BUSINESS

361. Cost of Doing Business. Gross profits are by no means an indication of the amount of money made by a business man. Out of the gross profits he must pay expenses such as rent, wages and salaries, cost of advertising, light, heat, insurance, taxes. There are losses due to bad debts, etc. In short he must pay the total cost of carrying on the business out of the gross profits. Included in the cost of doing business is a salary for the business man himself.

362. Net Profit. The gross profits less the cost of carrying on the business is net profit. It is comparatively easy to determine the total net profit of a business, but it is not so easy to determine whether or not the sale of any one article yields a net profit and how much.

In practical business it is very important, however, to know the net profit on a particular line of goods, since that will enable the business man to decide whether or not he should change certain details of his business. A complete treatment of this complicated problem is to be found in advanced works on accounting. We give here only the strictly arithmetical elements of the problem.

363. Apportioning Cost according to Price of Goods. In a small store the most practical method is to divide the cost of carrying on the business among the articles sold in proportion to their cost. In larger stores each department may be treated separately and special kinds of goods may have costs assessed against them in a special way. Thus, if in a small store the buying price of the goods bought and sold in one year is $37,500 and if the total cost of carrying on the business is $7250, then the cost of doing business is 7250 ÷ 37,500 = .1933 19.33%. Hence to find the net gain on an article sold in this store 19.33% of the purchase price must be added to the purchase price and the sum subtracted from the selling price.

=

The rate per cent computed in the preceding example is called the cost rate of doing business.

WRITTEN EXERCISES

1. In a store the yearly turnover was $78,250 and the cost of Find the cost rate of doing business.

doing business was $12,860.

364. Rate of Preceding Years Used in Marking Goods. For the purpose of marking goods the cost rate of doing business is estimated from the rate of the preceding year or better still from the average of several preceding years.

365. Gross Cost. The buying price plus the amount assessed against the article from the cost of doing business is called the gross cost.

WRITTEN EXERCISES

In a certain store the cost rate of doing business for several preceding years averaged 18.57%. Find the gross cost and the net gain on each of the articles given below. Enter the results on a suitable blank.