Details of Invoices for Purchases of Merchandise Are as Follows

question 85

Essay

Details of invoices for purchases of merchandise are as follows:
$\begin{array}{|l|l|l|l|}\hline\text { Returns and }\\\text { Allowances}&\text { Terms}&\text { Transportation}&\text { Merchandise}\\\hline \$ 200 & \text { FOB shipping point, } 1 / 10, \mathrm{n} / 30 & \$ 25 & \text { a. } \$ 1,000 \\\hline 400 & \text { FOB destination, } 1 / 30 & -- & \text { b. } 5,000 \\\hline 150 & \text { FOB shipping point, } 2 / 10, \mathrm{n} / 30 & 50 & c .4,000 \\\hline-- & \text { FOB destination, } 1 / 10,1 / 30 & \text {-- } & \text { d. } 5,000 \\\hline\end{array}$
Determine the amount to be paid in full settlement of each of the invoices, assuming that credit for returns and allowances was received prior to payment and that all invoices were paid within the discount period. Also assume that the seller has prepaid the transportation expenses.

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Definitions:

Price Level

Denotes the average of current prices across the entire spectrum of goods and services produced in the economy.

Skimming Pricing

Setting the highest initial price that customers really desiring the product are willing to pay when introducing a new or innovative product.

Highest Initial Price

A pricing strategy where a new product is introduced to the market at a high price before possibly lowering it later based on demand and competition.

Innovative Product

A new or significantly improved product that introduces a novel feature or fulfills a specific need in a new way.