Mike Morgan, a sales representative for a major food service distributor of Betty Crocker's Warm Delights, wanted to encourage repeat purchases by his grocery customers-supermarkets, mass merchandisers, etc. To accomplish this objective, Morgan offered the following discounts to his customers: a 10 percent discount for buying 1 to 49 cases of Warm Delights within a calendar month. The discount increases to 12 percent if 50 to 99 cases of Warm Delights are purchased and to 15 percent if 100 or more cases of Warm Delights are purchased within the same calendar month. What type of discount was Morgan offering his customers?
A)a seasonal discount
B)a quantity discount
C)a cash discount
D)a trade discount
E)a case allowance discount

Question

Quizplus · Accepted Answer

Morgan was offering quantity discounts based on the amount of Warm Delights purchased within a calendar month. The discount percentage increases with the quantity purchased, which distinguishes it from a simple trade discount or cash discount. There is no indication that the discount was limited to a specific season or for paying in cash, so options A and C can be eliminated. A case allowance discount typically involves a discount off the list price for a specific type of product, which is not mentioned in the scenario, so option E can also be eliminated.

Mike Morgan, a Sales Representative for a Major Food Service