Multiple Choice
When variable and fixed costs are added together, what financial metric is obtained?
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4. Merchandising Operations
Net Sales
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If a company offers a 30\% sales discount on a product originally priced at \$10, what is the net sales amount after the discount?
A
\$10
B
\$9
C
\$7
D
\$3
Verified step by step guidance1
Step 1: Understand the problem. The company is offering a 30% sales discount on a product originally priced at $10. The goal is to calculate the net sales amount after applying the discount.
Step 2: Identify the formula for calculating the discount amount. The discount amount can be calculated using the formula: Discount Amount = Original Price × Discount Rate. In this case, the Original Price is $10 and the Discount Rate is 30% (or 0.30).
Step 3: Subtract the discount amount from the original price to find the net sales amount. The formula for net sales amount is: Net Sales Amount = Original Price - Discount Amount.
Step 4: Substitute the values into the formulas. Use the Original Price of $10 and the Discount Rate of 0.30 to calculate the Discount Amount. Then subtract the Discount Amount from $10 to find the Net Sales Amount.
Step 5: Verify the calculation conceptually. Ensure that the net sales amount reflects the original price reduced by the discount percentage, and confirm that the result aligns with the expected discounted price.
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