Question 23
Purchase and Sale of GoodsA manufacturer sells 2,000 units to a wholesaler at ₦150 each, subject to a 10% trade discount. The wholesaler adds a 20% mark-up and sells to a retailer. The retailer sells to consumers at a 25% mark-up on the retailer's cost. Which of the following are CORRECT?
I. Wholesaler's purchase price = ₦135 per unit
II. Retailer's purchase price = ₦162 per unit
III. Consumer's price = ₦202.50 per unit
IV. Total trade discount = ₦30,000
- A.I, II, III and IV only
- B.I and III only
- C.II and IV only
- D.All of the above
Show the answer and explanation
Answer: D (All of the above)
Explanation
Wholesaler pays 150 − 15 = ₦135; retailer pays 135 × 1.2 = ₦162; consumer pays 162 × 1.25 = ₦202.50; discount = 2,000 × ₦15 = ₦30,000. All four are true.