Question

A retailer is considering the purchase of 1,000 units from two suppliers. Determine which offer yields the lower price:

Supplier One: $34.80 a unit, 1/10, 1/30, no charge for freight.
Supplier Two: $35.00 a unit, 2/10, n/30, plus freight of $200.

Answer 1

To determine the lower price offer, compare the total cost from each supplier. Supplier One offers a total cost of $34,800, while Supplier Two offers a total cost of $35,200. Thus, the lower price offer is from Supplier One.

Step-by-step explanation:

To determine which offer yields the lower price, we need to compare the total cost of purchasing 1,000 units from each supplier.

Supplier One offers each unit at $34.80 with no charge for freight. Therefore, the total cost for 1,000 units would be:

1. Price per unit: $34.80
2. Number of units: 1,000
3. Total cost: $34.80 * 1,000 = $34,800

Supplier Two offers each unit at $35.00 with a freight charge of $200. Therefore, the total cost for 1,000 units would be:

1. Price per unit: $35.00
2. Number of units: 1,000
3. Total cost: ($35.00 * 1,000) + $200 = $35,200

Comparing the total costs, we can see that Supplier One offers the lower price with a total cost of $34,800.