Mike Morgan, a Sales Representative for a Major Food Service

question 320

Multiple Choice

Mike Morgan, a sales representative for a major food service distributor of Betty Crocker's Warm Delights, wanted to encourage larger purchases by supermarkets and mass merchandisers. In order to accomplish this objective, Morgan offered the following discounts to his customers: a 10 percent discount for buying 1-49 cases of Warm Delights within a calendar month. The discount increases to 12 percent if 50-99 cases of Warm Delights are purchased and to 15 percent if 100 or more cases of Warm Delights are purchased within the same calendar month. What type of discount was Morgan offering his customers?

• A)a seasonal discount
• B)a quantity discount
• C)a cash discount
• D)a trade discount
• E)a case allowance discount

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Definitions:

Salvage Value

The calculated final value of an asset at the conclusion of its operational period.

Simple Rate of Return

A metric that calculates the percentage of profit or loss on an investment relative to its initial cost.

Operating Expenses

Regular expenses incurred in the day-to-day functioning of a business, excluding the cost of goods sold.

Sales Revenues

The income earned from selling goods or services before any costs or expenses are deducted.