IDIS 240 FINAL EXAM ACTUAL UPDATED 2026 MOST
TESTED Questions and CORRECT Answers (GRADED A+)
Who pays for the transportation and who controls the movement of shipments - VERIFIED
ANSWER✅ What is FOB (Free on Board)?
FOB shipping point - distributor pays for the freight
FOB destination - manufacturer pays for the freight - VERIFIED ANSWER✅ FOB shipping
point vs FOB destination
Freight allowed - the amount that must be purchased to have the manufacturer pay for
shipping
Minimum order - the minimum amount that you are allowed to order - VERIFIED ANSWER✅
What are the definitions of freight allowed and minimum order?
Include but are not limited to: salaries, commissions, travel costs, payroll costs,
entertainment costs, and advertising costs - VERIFIED ANSWER✅ What are selling, general,
and administrative (SG&A) expenses?
The amount the distributor owes for the products purchased and manufactured - VERIFIED
ANSWER✅ What are accounts payable?
how to distributors expand their market places? - VERIFIED ANSWER✅ distribute outside
their geographic area
,major trends benefitting the distributor - VERIFIED ANSWER✅ increasing value of info,
move toward mass customization, increased use of "just-in-time" inventory, reductions in #
of vendors
successful distributors reduce cost by.. - VERIFIED ANSWER✅ understanding the needs of
the manufacturer and becoming a true partner
the future of distribution - VERIFIED ANSWER✅ continued channel consolidation and
implementation
who benefits most from credit? - VERIFIED ANSWER✅ the customer, credit usually comes
at a cost to the wholesaler or distributor due to higher investment costs etc.
PAID - VERIFIED ANSWER✅ The Professional Association FOR Industrial Distribution
Maintenance, Repair, and Operations - VERIFIED ANSWER✅ There are three end users.
Which of the following is one of those end users?
The money customers owe distributors - VERIFIED ANSWER✅ What are accounts
receivable?
List Price - VERIFIED ANSWER✅ Listed price of a product
,Selling Price - VERIFIED ANSWER✅ -=list price - trade discounts
-the amount that appears on the invoice (amount paid by the customer)
-=COGS + Margin or =COGS +Markup
=COGS *(100% + Percent Markup)
=COGS / (100% - Percent Gross Margin)
Net Price - VERIFIED ANSWER✅ Selling price - allowable discounts (cash discounts),
customer does not pay the full selling price and a cash discount is announced to pay the bill
asap
Net Sale - VERIFIED ANSWER✅ -Actual money received by the distributor after discounts
and adjustments (substitutions, different quality or specifications, damaged products or
returned goods)
-=Net Price - Adjustments
(if no adjustments net sale = net price, if no cash discounts net price = selling price, if no
trade discounts selling price = list price)
Cost of Goods Sold (COGS) - VERIFIED ANSWER✅ =Cost of Merchandise + Freight from
Manufacturer
, Freight - VERIFIED ANSWER✅ -cost to move an item from where it is manufactured to
either the distributors or customers location
-terms of sale specifies who is responsible for payment
-Large quantities and Least expensive transportation system - manufacturer pays the
freight
-Prepay and bill- manufacturer pays the freight but charges for it in the bill
-Free of Board (F.O.B) means (-who pays for transportation, who controls the movement of
shipment)
-F.O.B. Shipping point: The manufacturer puts the merchandise on the truck after which it
becomes the responsibility of the distributor
-F.O.B Destination: The manufacturer would put the merchandise on the truck and pays for it
to be delivered.
Trade Discounts - VERIFIED ANSWER✅ -specified in "term of sale"
-Usually offered by the manufacturer owing to fluctuations in the market conditions like the
raw material cost
-Trade discounts may be extended further to customers by the distributor to meet local,
competitive market conditions
-Usually a discount off of a published list price or other published price
-lead discount is 25% (start with this), then subsequent discounts are 10% and then 5%
-EXAMPLE (2000*0.75*0.90*0.95)
Trade Pricing - VERIFIED ANSWER✅ -Pricing methodology that involves simply negotiating
the actual price that will be paid as opposed to "list price- trade discounts".
-Factors influencing are the same as those influencing trade discounts
TESTED Questions and CORRECT Answers (GRADED A+)
Who pays for the transportation and who controls the movement of shipments - VERIFIED
ANSWER✅ What is FOB (Free on Board)?
FOB shipping point - distributor pays for the freight
FOB destination - manufacturer pays for the freight - VERIFIED ANSWER✅ FOB shipping
point vs FOB destination
Freight allowed - the amount that must be purchased to have the manufacturer pay for
shipping
Minimum order - the minimum amount that you are allowed to order - VERIFIED ANSWER✅
What are the definitions of freight allowed and minimum order?
Include but are not limited to: salaries, commissions, travel costs, payroll costs,
entertainment costs, and advertising costs - VERIFIED ANSWER✅ What are selling, general,
and administrative (SG&A) expenses?
The amount the distributor owes for the products purchased and manufactured - VERIFIED
ANSWER✅ What are accounts payable?
how to distributors expand their market places? - VERIFIED ANSWER✅ distribute outside
their geographic area
,major trends benefitting the distributor - VERIFIED ANSWER✅ increasing value of info,
move toward mass customization, increased use of "just-in-time" inventory, reductions in #
of vendors
successful distributors reduce cost by.. - VERIFIED ANSWER✅ understanding the needs of
the manufacturer and becoming a true partner
the future of distribution - VERIFIED ANSWER✅ continued channel consolidation and
implementation
who benefits most from credit? - VERIFIED ANSWER✅ the customer, credit usually comes
at a cost to the wholesaler or distributor due to higher investment costs etc.
PAID - VERIFIED ANSWER✅ The Professional Association FOR Industrial Distribution
Maintenance, Repair, and Operations - VERIFIED ANSWER✅ There are three end users.
Which of the following is one of those end users?
The money customers owe distributors - VERIFIED ANSWER✅ What are accounts
receivable?
List Price - VERIFIED ANSWER✅ Listed price of a product
,Selling Price - VERIFIED ANSWER✅ -=list price - trade discounts
-the amount that appears on the invoice (amount paid by the customer)
-=COGS + Margin or =COGS +Markup
=COGS *(100% + Percent Markup)
=COGS / (100% - Percent Gross Margin)
Net Price - VERIFIED ANSWER✅ Selling price - allowable discounts (cash discounts),
customer does not pay the full selling price and a cash discount is announced to pay the bill
asap
Net Sale - VERIFIED ANSWER✅ -Actual money received by the distributor after discounts
and adjustments (substitutions, different quality or specifications, damaged products or
returned goods)
-=Net Price - Adjustments
(if no adjustments net sale = net price, if no cash discounts net price = selling price, if no
trade discounts selling price = list price)
Cost of Goods Sold (COGS) - VERIFIED ANSWER✅ =Cost of Merchandise + Freight from
Manufacturer
, Freight - VERIFIED ANSWER✅ -cost to move an item from where it is manufactured to
either the distributors or customers location
-terms of sale specifies who is responsible for payment
-Large quantities and Least expensive transportation system - manufacturer pays the
freight
-Prepay and bill- manufacturer pays the freight but charges for it in the bill
-Free of Board (F.O.B) means (-who pays for transportation, who controls the movement of
shipment)
-F.O.B. Shipping point: The manufacturer puts the merchandise on the truck after which it
becomes the responsibility of the distributor
-F.O.B Destination: The manufacturer would put the merchandise on the truck and pays for it
to be delivered.
Trade Discounts - VERIFIED ANSWER✅ -specified in "term of sale"
-Usually offered by the manufacturer owing to fluctuations in the market conditions like the
raw material cost
-Trade discounts may be extended further to customers by the distributor to meet local,
competitive market conditions
-Usually a discount off of a published list price or other published price
-lead discount is 25% (start with this), then subsequent discounts are 10% and then 5%
-EXAMPLE (2000*0.75*0.90*0.95)
Trade Pricing - VERIFIED ANSWER✅ -Pricing methodology that involves simply negotiating
the actual price that will be paid as opposed to "list price- trade discounts".
-Factors influencing are the same as those influencing trade discounts
