A Quantity Discount Is a Price Reduction for Buyers Who

question 85

Multiple Choice

A quantity discount is a price reduction for buyers who ________.

• A) buy merchandise out of season
• B) buy merchandise in bulk
• C) pay their bills on time
• D) buy discontinued products
• E) return old items while buying new ones

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Definitions:

Target Sales Volume

The specific quantity of products a company aims to sell within a certain period to achieve its sales objectives and ensure profitability.

Fixed Costs

Expenses that remain constant regardless of how much is produced or sold, including items like rent, salaries, and insurance.

Unit Contribution Margin

The difference between the selling price per unit and the variable costs per unit, which contributes towards covering fixed costs and generating profit.

Cost Volume Profit Graph

A graphical representation that shows how changes in cost, volume, and profit affect a company's financial situation.