Question

Kroger is being pursued by 2 vendors of Valentine's candy. One will sell the candy to them in January at $8.50 a box. The candy is invoiced and shipped on Jan 27 and received on Feb 9. Terms are 8/10 EOM 30X. The other vendor ships and invoices on Nov 15 and offers terms of 6/10 EOM at $7.50 a box. They receive the candy Dec 2 (They plan to buy 1000 boxes. What will each vendor cost and when will discounted payment be due?

(Show work)

Answer 1

One that is selling in January
Purchase Cost = $8.50 x 1000 = $8500
Discount = $8500 x 8% = $680
Vendor Cost = $8500 - $680 = $7820
Vendor Cost per unit = $7820 /1000 = $7.82

Discounted payment will be due on 10th March since the goods have been received on Feb 9

One that is selling in November
Purchase Cost = $7.50 x 1000 = $7500
Discount = $7500 x 6% = $450
Vendor Cost = $7500 - $450 = $7050
Vendor Cost per unit = $7050 /1000 = $7.05

Discounted payment will be due on 10th January since goods have been received on December 2