Supplier One: $400 a unit, total of $100,000, 1/10, n/30, no charge for freight.
Supplier Two: $399 a unit, total of $99,750, 2/10, n/30, plus freight of $975.
Which of the two offers, Supplier One or Supplier Two, yields the lower price?
Answer:
The offer of Supplier Two is lower than the offer of Supplier One. Details are as follows:
Supplier One Supplier Two
List price $100,000 $99,750
Less discount 1,000 1,995
$ 99,000 $97,755
Freight 975
$ 99,000 $98,730