1|Page
IDIS 240 EXAM 2 - EVAN VESTAL -
SPRING 2025 QUESTIONS AND
ANSWERS 100% PASS
List Price - ANSWER ✔✔-Nationally Advertised Price
Selling Price - ANSWER ✔✔-List Price - Trade Discounts
= COGS + Margin
or
= COGS + Markup
Net Price - ANSWER ✔✔-Selling price - all allowable discounts (cash discounts), equal to selling price IF
NO DISCOUNTS
Cost of Goods Sold (COGS) - ANSWER ✔✔-Cost of Merchandise + Freight charges from Manufacturer
Freight Cost - ANSWER ✔✔-The cost of moving an item from where it was manufactured to either the
distributor or the customer's location
Free On Board (FOB) - ANSWER ✔✔-- Commonly used on the invoice to show who is to pay the
transportation charges
- Who is to control the movement of the shipment
Created by ©EmilyCharlene 2025. All rights reserved.
,2|Page
- Where the title passes to the buyer
Free On Board (FOB) Destination - ANSWER ✔✔-Manufacturer pays to have it delivered, own the
product while it's being transported
Free On Board (FOB) Shipping Point *** - ANSWER ✔✔-Once the manufacturer puts it on the trust,
distributor pays for it and they own it
Trade Discounts - ANSWER ✔✔-- Means of adjusting the price for variations in the cost of raw materials
- Competitive pricing in the marketplace
- For services provided by the distributor (stocking the item)
Trade Pricing *** - ANSWER ✔✔-- A pricing methodology that involves negotiating the actual price that
will be paid as opposed to "list price - a discount" method
- Referred to as matrix pricing, a markup from a confidential negotiated distributor cost
Two drivers to growth of this type
- Increased complexity
- System capabilities
Cash Discounts *** - ANSWER ✔✔-- Offered to encourage early payment of invoices and when taken
they will enhance the sellers cash flow
Created by ©EmilyCharlene 2025. All rights reserved.
, 3|Page
- Amount that can be subtracted by the total amount of the invoice by the distributor before paying the
bill
- Offered as encouragement to a distributor to pay their invoice within a specific amount of time
- CASH DISCOUNTS ARE NOT GIVEN, they are offered then taken or refused by the distributor
- Cash discounts are important to profitability
Special Orders - ANSWER ✔✔-Usually consist of standard products with slight modifications to design,
finish, materials and packaging
Minimum Order - ANSWER ✔✔-Minimum amount you need to order to purchase
Freight Allowed - ANSWER ✔✔-Amount that must be purchased to have the manufacturer pay the cost
of the freight for a standard shipment
Claims - ANSWER ✔✔-Making a claim that it is broken, damaged, lost. Billing or shipping errors,
shortages
Returns - ANSWER ✔✔-You don't get all of your money back, 10-20% restocking fee
Margin Dollars - ANSWER ✔✔-- Margin dollars are used to pay employee cost in wages, benefits, and all
other costs of doing business
- Margin dollars should generate a reasonable amount of profit after paying everything
Created by ©EmilyCharlene 2025. All rights reserved.
IDIS 240 EXAM 2 - EVAN VESTAL -
SPRING 2025 QUESTIONS AND
ANSWERS 100% PASS
List Price - ANSWER ✔✔-Nationally Advertised Price
Selling Price - ANSWER ✔✔-List Price - Trade Discounts
= COGS + Margin
or
= COGS + Markup
Net Price - ANSWER ✔✔-Selling price - all allowable discounts (cash discounts), equal to selling price IF
NO DISCOUNTS
Cost of Goods Sold (COGS) - ANSWER ✔✔-Cost of Merchandise + Freight charges from Manufacturer
Freight Cost - ANSWER ✔✔-The cost of moving an item from where it was manufactured to either the
distributor or the customer's location
Free On Board (FOB) - ANSWER ✔✔-- Commonly used on the invoice to show who is to pay the
transportation charges
- Who is to control the movement of the shipment
Created by ©EmilyCharlene 2025. All rights reserved.
,2|Page
- Where the title passes to the buyer
Free On Board (FOB) Destination - ANSWER ✔✔-Manufacturer pays to have it delivered, own the
product while it's being transported
Free On Board (FOB) Shipping Point *** - ANSWER ✔✔-Once the manufacturer puts it on the trust,
distributor pays for it and they own it
Trade Discounts - ANSWER ✔✔-- Means of adjusting the price for variations in the cost of raw materials
- Competitive pricing in the marketplace
- For services provided by the distributor (stocking the item)
Trade Pricing *** - ANSWER ✔✔-- A pricing methodology that involves negotiating the actual price that
will be paid as opposed to "list price - a discount" method
- Referred to as matrix pricing, a markup from a confidential negotiated distributor cost
Two drivers to growth of this type
- Increased complexity
- System capabilities
Cash Discounts *** - ANSWER ✔✔-- Offered to encourage early payment of invoices and when taken
they will enhance the sellers cash flow
Created by ©EmilyCharlene 2025. All rights reserved.
, 3|Page
- Amount that can be subtracted by the total amount of the invoice by the distributor before paying the
bill
- Offered as encouragement to a distributor to pay their invoice within a specific amount of time
- CASH DISCOUNTS ARE NOT GIVEN, they are offered then taken or refused by the distributor
- Cash discounts are important to profitability
Special Orders - ANSWER ✔✔-Usually consist of standard products with slight modifications to design,
finish, materials and packaging
Minimum Order - ANSWER ✔✔-Minimum amount you need to order to purchase
Freight Allowed - ANSWER ✔✔-Amount that must be purchased to have the manufacturer pay the cost
of the freight for a standard shipment
Claims - ANSWER ✔✔-Making a claim that it is broken, damaged, lost. Billing or shipping errors,
shortages
Returns - ANSWER ✔✔-You don't get all of your money back, 10-20% restocking fee
Margin Dollars - ANSWER ✔✔-- Margin dollars are used to pay employee cost in wages, benefits, and all
other costs of doing business
- Margin dollars should generate a reasonable amount of profit after paying everything
Created by ©EmilyCharlene 2025. All rights reserved.
