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Need Help with Case Studies 8-3 and 9-1

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Question;Need Help. Thanks8-3;The Artist?s Palette sells high-end art supplies to the art;students at three regional art and design;schools in Philadelphia, Washington, D.C., and Baltimore. It;carries paints, brushes, drawing pads;frames, charcoal, pastels, and other supplies used in a;variety of artistic media. Because its clien-;tele is very discriminating, The Artist?s Palette tends to;carry only the top lines in its inventory and;it is known for having the best selection on hand. It is;rare that an item is out of stock. Artists can;visit the store, purchase from The Artist?s Palette catalog;or from the secure web site.;1. The Artist?s Palette purchases;its inventory from a number of suppliers and each supplier of-;fers different purchasing;discounts. The manager of The Artist?s Palette, Marty Parma, is;currently comparing two offers;for purchasing modeling clay and supplies. The first com-;pany 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, what is the;net price from supplier 1? From supplier 2? From which sup-;plier would you recommend Parma;purchase her modeling clay and supplies?;2. What is the net decimal;equivalent for supplier 1? For supplier 2?;3. What is the trade discount from supplier 1? From supplier;2?;4. The Artist?s 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 Artist?s 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 pay-ing early?;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;9-1;Karen is an acupuncturist with a;busy practice. In addition to acupuncture services, Karen sells teas;herbal supplements, and;rice-filled heating pads. Because Karen?s primary income is from acupuncture;she feels that she is providing;the other items simply to fill a need and not as an important source of;profits. As a matter of fact, the;rice-filled heating pads are made by a patient who receives acupuncture;for them instead of paying cash.;The rice-filled pads cost Karen $5.00, $8.00, and $12.00, respectively;for small, medium, and large;sizes. The ginger tea, relaxing tea, cold & flu tea, and detox tea cost her;$2.59 per box plus $5.00 shipping;and handling for 24 boxes. Karen uses a cost plus markup method;whereby she adds the same set;amount to each box of tea. She figures that each box costs $2.59 plus;$0.21 shipping and handling;which totals $2.80, then she adds $0.70 profit to each box and sells it for;$3.50. Do you think this is a;good pricing strategy? How would it compare to marking up by a percent-;age of the cost?;1. What is the markup percentage;for a box of ginger tea?;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?;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 month?s;sales?;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.

 

Paper#44571 | Written in 18-Jul-2015

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