IDIS 240 Vestal Exam 2 Questions and Answers(A+ Solution guide)

What is the price dependent on? - ️️1. What the manufacturer wants it to be 2. The market place 3. Supplier analyses the market and decides the price that it is willing to pay for the product to the manufacturer. Trade discounts are how the distributor is paid for their services to manufacturer and the customer GM - ️️Gross margin- The difference in what the distributor pays for the product and what they spend GM = - ️️Selling price - COGS- Adjustments Markup - ️️The money the distributor adds to the COGS Markup= Selling Price - COGS Operating Expenses - ️️Includes al cost necessary to provide the services Ex. Warehouse cost, inventory holding, transport Selling General and Administrative Expenses - ️️Salary, payroll, travel, entertainment, etc. Depreciation and Amortization - ️️Expense that contains the reduction in values of assets over time Agent - ️️Very similar to a manufacturing sale representative that usually represents multiple companies. May call on distributors, end users, specifiers, and manufacturers. Rarely stock but never own products. List Price - ️️Listen price of the product Selling Price - ️️the amount that appears on the invoice (amount paid by customer) Selling price= list price- trade discounts Net Price - ️️Customer doesn't pay the full selling price and a cash discount is announced to pay the as soon as possible Net price= selling price- cash discountsNet Sale - ️️Actual amount received by the distributor after all adjustments are made to the net price. 3 Types of adjustments - ️️1. Substitutions 2. Different quality or specifications than those that are ordered 3. Damaged or returned goods by the customer