Case 8-3 Template

INSTRUCTIONS: Read the case in the textbook. As a team, answer the questions in this spreadsheet, then save and submit the assignment as
one Microsoft ExcelExcel attachment. Also, submit a 1-paragraph Microsoft Word document explaining any issues or successes you had in
answering these questions.
Refer to and use the following abbreviations for the problems below:
PP = Parma minimum supply purchase
S1 = Supplier 1
S2 = Supplier 2
CDF = Chain Discount Factor
NP = Net Price
NDE = Net Decimal Equivalent
TD = Trade Discount
1. The Artists Palette purchases its inventory from a number of suppliers and each supplier offers different purchasing discounts. The
manager of The Artists Palette, Marty Parma, is currently comparing two offers for purchasing modeling clay and supplies. The first
company offers a chain discount of 20/10/5, and the second company offers a chain discount of 18/12/7 as long as the total purchases are
$300 or more. Assuming Parma purchases $300 worth of supplies, a) what is the net price from supplier 1? And b) From supplier 2? And c)
From which supplier would you recommend Parma purchase her modeling clay and supplies?
(Use this cell to answer parts a, b, and c. Be sure to show your work.)
Part A
Supplier 1
$300(0.20) = $60
$300 - $60 = $240
$240(0.10) = $24
$240 - $24 = $216
$216(0.05) = $10.80
Net Price = $216 - $10.80 = $205.20
OR A more direct formula: Net Price = $300(0.8)(0.9)(0.95) = $205.20
Part B
Supplier 2
$300(0.18) = $54
$300 - $54 = $246
$246(0.12) = $29.52
$246 - $29.52 = $216.48
$216.48(0.07) = $15.15
$216.48 - $15.15 = $201.33
OR A more direct formula: Net Price= $300(0.82)(0.88)(0.93) = $201.33
Part C
Parma would save $3.87 with supplier 2. The difference in the net price of the two suppliers; $205.20 - $201.33 = $3.87
S1 S2
PP= $300.00 $300.00
1st CDF 0.80 0.82
2nd CDF 0.90 0.88
3rd CDF 0.95 0.93
NP= $205.20 $201.33
S1 S2
1st CDF 0.80 0.82
2nd CDF 0.90 0.88
3rd CDF 0.95 0.93
NDE= 0.684 0.671088
S1 S2
Use the marked cells below to fill in the appropriate numbers for the variables to check your answers.
Variables Used
2. What is the net decimal equivalent for supplier 1? For supplier 2?
Now use the marked cells below to fill in the appropriate numbers for the variables to check your answers.
Variables Used
Excel Formula
In the yellow cells, create the Microsoft Excel formulas that will give you the net
prices for the two suppliers. Use cell references in the formulado NOT use numbers.
Excel Formula
In the yellow cells, create the Microsoft Excel formulas that will give you the net
decimal equivalent for the two suppliers. Use cell references in the formulado NOT
use numbers.
(Show your work in this cell to solve for the net decimal equivalent for the two suppliers.)
Supplier 1
(0.80)(0.90)(0.95) = 0.648
Supplier 2
(0.82)(0.88)(0.93) = 0.671088 (rounded)
Use the marked cells below to fill in the appropriate numbers for the variables to check your answers.
3. What is the trade discount from supplier 1? From supplier 2?
(Show your work in this cell to solve for the trade discount for the two suppliers.)
Supplier 1
1 - 0.684 = 0.316
0.316($300) = $94.80
Supplier 2
1 - 0.671088 = 0.328912
0.328912(300) = $98.67 (rounded)
Variables Used
PP= $300.00 $300.00
NDE 0.684 0.671088
TD= $94.80 $98.67
Original Cost= $250.00
Discount= 2.00%
Due by 9/26= $245.00
Amount
saved
$5.00
Use the marked cells below to fill in the appropriate numbers for the variables to check your answers.
Variables Used
Excel Formula
In the yellow cells, create the Microsoft Excel formulas that will give you the trade
discount for the two suppliers. Use cell references in the formulado NOT use
numbers.
4. The Artists Palette recognizes that students may purchase supplies at the beginning of the term to cover all of their art class needs.
Because this could represent a fairly substantial outlay, the Artists Palette offers discounts to those students who pay sooner than
required. Assume that if students buy more than $250 of art supplies in one visit, they may put it on a student account with terms of 2/10,
n/30. If a student purchases $250 of supplies on September 16, what amount is due by September 26? How much would the student save by
paying early?
(Show your work in this cell to solve for the amount due by September 26 and the amount saved by paying early.)
Due by Sept. 26: $250(0.98) = $245
Amount saved by paying early: $250 - $245 = $5
(Use this cell to respond to the questions.)
If the purchase is made on September 16, the offer expires on October 10.
If the purchase is made on September 26, the offer expires on November 10.
Both discount periods are the same. If the student is not paying during the discount period and the purchase is made on September 26, the 2/10
EOM gives the student longer to pay.
5. Assume that if students buy more than $250 of art supplies in one visit, they may put the charge on a student account with terms of 2/10
EOM. If a student makes the purchase on September 16, on what day does the 2% discount expire? If the purchase is made on September
26, on what day does the 2% discount expire? If you were an art student, which method would you prefer: 2/10, n/30, or 2/10 EOM?
Excel Formula
In the yellow cells, create the Microsoft Excel formulas that will give you the
amount due by September 26 and the amount saved by paying early. Use cell
references in the formulado NOT use numbers.
Cost per BT= $2.59
S&H= $0.21
P= $0.70
Ginger Tea %
Markup
25.00%
Small RFP Selling
Price=
$7.00
Medium RFP Selling
Price=
$10.00
Use the marked cells below to fill in the appropriate numbers for the variables to check your answers.
Variables Used
(Show your work in this cell to solve for the markup percentage for a box of ginger tea.)
Ginger Tea Markup: $0.70/($2.59 + $0.21) = 0.25 = 25%
2. If the rice-filled heating pads sell for $7.00, $10.00, and $15.00 for small, medium, and large, respectively, what is the markup percentage on each one?
(Show your work in this cell to solve for the markup percentages for small, medium, and large rice-filled heating pads.)
Small rice-filled heating pads
$7.00 - $5.00 = $2.00 markup, so $2.00/$5.00 = 40% markup for the small size
Medium rice-filled heating pads
$10.00 - $8.00 = $2.00 markup, so $2.00/$8.00 = 25% markup for the medium size
Large rice-filled heating pads
$15.00 - $12.00 = $3.00 markup, so $3.00/$12.00 = 25% markup for the large size
Variables Used
Excel Formulas
In the yellow cells, create the Microsoft Excel formula that will give you the ginger tea markup
percentage. Use cell references in the formulado NOT use numbers.
Now use the marked cells below to fill in the appropriate numbers for the variables to check your answers.
1. What is the markup percentage for a box of ginger tea?
Case 9-1 Template
INSTRUCTIONS: Read the case in the textbook. As a team, answer the questions in this spreadsheet, then save and submit the assignment as one Microsoft Excel
attachment. Also, submit a 1-paragraph Microsoft Word document explaining any issues or successes you had in answering these questions.
Refer to and use the following abbreviations for the problems below:
BT = Box of tea
S&H = Shipping and handling
P = Desired profit per box of tea
RFP = Rice-filled pad
Large RFP Selling
Price=
$15.00
Small RFP Cost= $5.00
Medium RFP Cost= $8.00
Large RFP Cost= $12.00
Small % Markup= 40.00%
Medium %
Markup=
25.00%
Large % Markup= 25.00%
Amount Sold
Small RFP Selling
Price=
$7.00 2
Medium RFP Selling
Price=
$10.00 4
Large RFP Selling
Price=
$15.00 2
Excel Formulas
In the yellow cells, create the Microsoft Excelformulas that will give you the markup percentages for
small, medium, and large rice-filled heating pads. Use cell references in the formulado NOT use
numbers.
Variables Used
3. Karen wants to compare using the cost plus method to the percentage markup method. If she sells 2 small rice pads, 4 medium rice pads, 2 large rice pads, and 20
boxes of $3.50 tea in a month, how much profit does she accumulate? What markup percentage based on cost would she have to use to make the same amount of
profit on this months sales?
(Show your work in this cell to solve for the profit she accumulates and the markup percentage based on cost she would have to use to make the same amount of
profit.)
Profit
2 small rice pads profit: $2 (2) = $ 4
4 medium rice pads profit: $2 (4) = $ 8
2 large rice pads profit: $3 (2) = $ 6
20 boxes of tea profit: $0.70 (20) = $ 14
Total profit= $32
Cost
2 small rice pads cost: $5 (2) = $ 10
4 medium rice pads cost: $8 (4) = $ 32
2 large rice pads cost: $12 (2) = $ 24
20 boxes of tea cost: $2.80 (20) = $ 56
Total cost= $122
Markup percentage based on cost= $32/$122 = 0.2623 = 26.23%
Use the marked cells below to fill in the appropriate numbers for the variables to check your answers.
BT Selling Price $3.50 20
Small RFP Cost= $5.00 2
Medium RFP Cost= $8.00 4
Large RFP Cost= $12.00 2
BT Cost $2.80 20
Total Profit $32.00
Total Cost $122.00
Markup % based on
cost=
26.23%
Small RFP Cost= $5.00
Medium RFP Cost= $8.00
Large RFP Cost= $12.00
BT Cost $2.80
Markup % based on
cost=
26%
Small RFP Selling
Price=
$6.30
Medium RFP Selling
Price=
$10.08
Large RFP Selling
Price=
$15.12
BT Selling Price $3.53
Excel Formulas
In the yellow cells, create the Microsoft Excel formulas that will give you the total profit, total cost,
and required markup percentage based on cost. Use cell references in the formulado NOT use
numbers.
Excel Formulas
4. What prices should Karen charge (using the markup percentage) to obtain the same amount of profit as she did with the cost plus method? Do not include
shipping.
(Show your work in this cell to solve for the profit she accumulates and the markup percentage based on cost she would have to use to make the same amount of
profit.)
Selling price = cost + (cost * markup)
small rice pads $5 + ($5)(26%) = $6.30
medium rice pads $8 + ($8)(26%) = $10.08
large rice pads $12 + ($12)(26%) = $15.12
boxes of tea $2.80 + ($2.80)(26%) = $3.53
Use the marked cells below to fill in the appropriate numbers for the variables to check your answers.
Variables Used
In the yellow cells, create the Microsoft Excel formulas that will give you the selling prices based on
markup percentage. Use cell references in the formulado NOT use numbers.
Use the marked cells below to fill in the appropriate numbers for the variables to check your answers.
(Show your work in this cell to solve for the markup percentage for a box of ginger tea.)
Ginger Tea Markup: $0.70/($2.59 + $0.21) = 0.25 = 25%
2. If the rice-filled heating pads sell for $7.00, $10.00, and $15.00 for small, medium, and large, respectively, what is the markup percentage on each one?
(Show your work in this cell to solve for the markup percentages for small, medium, and large rice-filled heating pads.)
Small rice-filled heating pads
$7.00 - $5.00 = $2.00 markup, so $2.00/$5.00 = 40% markup for the small size
Medium rice-filled heating pads
$10.00 - $8.00 = $2.00 markup, so $2.00/$8.00 = 25% markup for the medium size
Large rice-filled heating pads
$15.00 - $12.00 = $3.00 markup, so $3.00/$12.00 = 25% markup for the large size
In the yellow cells, create the Microsoft Excel formula that will give you the ginger tea markup
percentage. Use cell references in the formulado NOT use numbers.
Now use the marked cells below to fill in the appropriate numbers for the variables to check your answers.
1. What is the markup percentage for a box of ginger tea?
Case 9-1 Template
INSTRUCTIONS: Read the case in the textbook. As a team, answer the questions in this spreadsheet, then save and submit the assignment as one Microsoft Excel
attachment. Also, submit a 1-paragraph Microsoft Word document explaining any issues or successes you had in answering these questions.
Refer to and use the following abbreviations for the problems below:
BT = Box of tea
S&H = Shipping and handling
P = Desired profit per box of tea
RFP = Rice-filled pad
In the yellow cells, create the Microsoft Excelformulas that will give you the markup percentages for
small, medium, and large rice-filled heating pads. Use cell references in the formulado NOT use
numbers.
3. Karen wants to compare using the cost plus method to the percentage markup method. If she sells 2 small rice pads, 4 medium rice pads, 2 large rice pads, and 20
boxes of $3.50 tea in a month, how much profit does she accumulate? What markup percentage based on cost would she have to use to make the same amount of
profit on this months sales?
(Show your work in this cell to solve for the profit she accumulates and the markup percentage based on cost she would have to use to make the same amount of
profit.)
Profit
2 small rice pads profit: $2 (2) = $ 4
4 medium rice pads profit: $2 (4) = $ 8
2 large rice pads profit: $3 (2) = $ 6
20 boxes of tea profit: $0.70 (20) = $ 14
Total profit= $32
Cost
2 small rice pads cost: $5 (2) = $ 10
4 medium rice pads cost: $8 (4) = $ 32
2 large rice pads cost: $12 (2) = $ 24
20 boxes of tea cost: $2.80 (20) = $ 56
Total cost= $122
Markup percentage based on cost= $32/$122 = 0.2623 = 26.23%
Use the marked cells below to fill in the appropriate numbers for the variables to check your answers.
In the yellow cells, create the Microsoft Excel formulas that will give you the total profit, total cost,
and required markup percentage based on cost. Use cell references in the formulado NOT use
numbers.
4. What prices should Karen charge (using the markup percentage) to obtain the same amount of profit as she did with the cost plus method? Do not include
shipping.
(Show your work in this cell to solve for the profit she accumulates and the markup percentage based on cost she would have to use to make the same amount of
profit.)
Selling price = cost + (cost * markup)
small rice pads $5 + ($5)(26%) = $6.30
medium rice pads $8 + ($8)(26%) = $10.08
large rice pads $12 + ($12)(26%) = $15.12
boxes of tea $2.80 + ($2.80)(26%) = $3.53
Use the marked cells below to fill in the appropriate numbers for the variables to check your answers.
In the yellow cells, create the Microsoft Excel formulas that will give you the selling prices based on
markup percentage. Use cell references in the formulado NOT use numbers.