Why Are Quantity Discounts Most Often Used

question 68

Multiple Choice

Why are quantity discounts most often used?

• A) to increase the sales potential of slow-moving items
• B) to reward a channel intermediary for performing some service
• C) to reward the buyer who pays in cash
• D) to shift the storage function backward to the supplier

---

Definitions:

Cash Expenditures

Outflows of cash for expenses or investments, often tracked to monitor financial health and cash management.

Monthly Ending Inventories

The quantities and valuation of goods available for sale or use, recorded at the end of each month.

Budgeted Production

The estimated amount of goods that a company plans to produce in a certain period, used in planning and cost control.

Merchandise Purchases

The total cost of goods bought for resale during a specific accounting period, excluding any discounts or allowances.