Jasper Company, Inc. is a wholesaler that buys merchandise in large quantities. Its supplier's catalog indicates a list price of $500 per unit on merchandise Jasper intends to purchase, and the supplier offers a 30% trade discount for large quantity purchases. The cost of shipping the merchandise is $7 per unit. Jasper's net purchase price per unit will be:
A)$507
B)$350
C)$357
D)$343
E)$493

Question

Quizplus · Accepted Answer

The trade discount offered by the supplier is 30%. Therefore, the net price for each unit will be:

List price = $500
Trade discount = 30% of $500 = $150
Net price = $500 - $150 = $350

Adding the shipping cost of $7 per unit, the net purchase price will be:

Net purchase price = $350 + $7 = $357

Therefore, the best choice is Option C) with a net purchase price of $357 per unit.