Fragment Company is a wholesaler that sells merchandise in large quantities. Its catalog indicates a list price of $300 per unit on a particular product and a 40% trade discount is offered for quantity purchases of 50 units or more. The cost of shipping the merchandise is $7 per unit under terms FOB shipping point. If a customer purchases 100 units of this product, what is the amount of sales revenue that Fragment will record from this sale?
A) $30,000
B) $29,300
C) $18,700
D) $30,700
E) $18,000

Question

Quizplus · Accepted Answer

The sales revenue is calculated as the list price minus the trade discount. The list price is $300 per unit, and with a 40% trade discount, the price per unit becomes $180 ($300 - $120). For 100 units, the sales revenue is $18,000 (100 units x $180). Shipping costs are not included in sales revenue.

Fragment Company Is a Wholesaler That Sells Merchandise in Large