11

Business
Mathematics
Quarter 1 – Week 6:
Key Concepts in Buying and Selling
RINA N. ESPAÑOL

Introductory Message
For the facilitator:

Welcome to the Grade 11 Business Mathematics Self-Learning Module (SLM) on Key

Concepts of Buying and Selling!

This module was collaboratively designed, developed and reviewed by educators both from
public and private institutions to assist you, the teacher or facilitator in helping the learners
meet the standards set by the K to 12 Curriculum while overcoming their personal, social,
and economic constraints in schooling.

This learning resource hopes to engage the learners into guided and independent learning
activities at their own pace and time. Furthermore, this also aims to help learners acquire the
needed 21st century skills while taking into consideration their needs and circumstances.

In addition to the material in the main text, you will also see this box in the body of the
module:

Notes to the Teacher

This contains helpful tips or strategies that will
help you in guiding the learners.

As a facilitator you are expected to orient the learners on how to use this module. You also
need to keep track of the learners' progress while allowing them to manage their own
learning. Furthermore, you are expected to encourage and assist the learners as they do the
tasks included in the module.

For the learner:

Welcome to the Grade 11 Business Mathematics Self-Learning Module (SLM) on Key
Concepts of Buying and Selling!

The hand is one of the most symbolized part of the human body. It is often used to depict
skill, action and purpose. Through our hands we may learn, create and accomplish. Hence,
the hand in this learning resource signifies that you as a learner is capable and empowered to
successfully achieve the relevant competencies and skills at your own pace and time. Your
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Key at the end of the module.

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This contains answers to all activities in the

module.

At the end of this module you will also find:

References This is a list of all sources used in developing

this module.

The following are some reminders in using this module:

1. Use the module with care. Do not put unnecessary mark/s on any part of the module.
Use a separate sheet of paper in answering the exercises.
 2. Don’t forget to answer What I Know before moving on to the other activities included
in the module.
3. Read the instruction carefully before doing each task.
4. Observe honesty and integrity in doing the tasks and checking your answers.
5. Finish the task at hand before proceeding to the next.
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If you encounter any difficulty in answering the tasks in this module, do not hesitate to
consult your teacher or facilitator. Always bear in mind that you are not alone.

We hope that through this material, you will experience meaningful learning and gain deep
understanding of the relevant competencies. You can do it!

This module was designed and written with you in mind. It is here to help you master
how to Compute single trade discounts and discount series. The scope of this module
permits it to be used in many different learning situations. The language used recognizes the
diverse vocabulary level of students. The lessons are arranged to follow the standard
sequence of the course. But the order in which you read them can be changed to correspond
with the textbook you are now using.

This module is comprised of only one lesson:

1. Single trade discounts and discount series.

After going through this module, you are expected to:

1. Compute single trade discounts and discount series.
 Find how much you already know about the topic in this module. Take note of the
items that you were not able to answer correctly and find the right answer as you go through
this module.

Write the letter of the correct answer on your answer sheet.

1. A _____________ is the amount by which the retail price of a product is reduced by

the manufacturer when it is sold to the reseller or customer.
a. Cash Discount
b. Net price
c. Trade Discount
d. Trade Discount Rate

2. Original Price: PhP27,800; Discount rate: 35%; Discount: _____ ?

a. PhP9,730
b. PhP97,300
c. PhP7,930
d. PhP18,070

1 n 1
3. The terms of sale , means that or 10% of the invoice amount may be
10 30 10
deducted if paid within 30 days.
a. True
b. False

20
4. What is the single discount equivalent of a trade discount of ?
10
a. 30%
b. 27%
c. 35%
d. 28%
5. The Smith Corporation received an $875 invoice with terms of 3/10, n/30. The firm
could not pay the entire bill within 10 days but sent a check for $500. What amount
was credited to their bill?
a. PhP500
b. PhP515.46
c. PhP510.12
d. PhP16,666.67

6. With FOB Shipping Point, who pays for the shipping cost?
a. Buyer b. Seller

7. With FOB Destination, who pays for the shipping cost?

a. Buyer b. Seller

8. A manufacturer lists a desk at PhP30 000 with a discount series of 20/15/10. What is
the final cost of the desk after the discounts?
a. PhP18 360.00
b. PhP11 640.00
c. PhP22 571.00
d. PhP19 406.00

9. When a discount is applied to an item, the amount you pay for the item is called the:
a. original price
b. sale price
c. percent off
d. discount

10. A pair of boots are PhP4 749.50. They are 25% off. What is the discount?
a. PhP3 562.00
b. PhP8 311.50
c. PhP5 937.00
d. PhP1 187.50
 Lesson Single Trade Discounts and Discount
5 Series

Hi there! Welcome back! Isn’t it interesting to talk about money?

Money….money…money. And it becomes more interesting when it comes to DISCOUNT,
isn’t it?
What other things, rather than money, that comes into your mind when you
hear the word DISCOUNT?
 (bearsky23, 2004)

After examining the pictures, please try to answer the following questions.
1. Did you think about sale? How about savings?
2. Where do you find sale items?
3. Who do you think recommends the sale of an item?

Trade Discount is a reduction from list price granted to buyers. It could take
the form of volume discount for large purchases, cash discount or other special discount
granted at the discretion of the seller. Trade discounts could either be a single discount or
a series of discounts.

Let us first talk about single trade discounts.

1. When a customer regularly buy from the same store or regular vendor (“suki”), they
are sometimes given an incentive for patronizing the store. That incentive is also what
we called loyalty discount.
2. A cash discount is a deduction allowed by some sellers of goods or by some
providers of services in order to motivate customers to pay within a specified time.
 3. When a customers buy in bulk, during peak season, the seller or manufacturer rewards
those buying in bulk by providing a reduced price for each good or group of goods.
This is called volume discount.

There are many things that influence the rate of discount given to a buyer. Can you think
of those? State your answer.
________________________________________________________________________
________________________________________________________________________
________________________________________________________________________
______________________________________________________________.

To compute for the Trade Discount:

TRADE DISCOUNT = TRADE DISCOUNT RATE x SELLING PRICE

Note to the Students

There are different terms that may be used in computing discount. Selling
Price could be called as List price, while Trade Discount is sometimes called as
Discount only. Different books may opt to use different terms but the same definition.

Illustrative Example 1.
My regular pork supplier gives me a 7% discount on my meat purchases every week.
If the price of pork loin this week is PhP350 per kilo and I am planning to buy 1.5 kilos, how
much trade discount will I receive from this purchase?
Given:
Discount rate = 7%
Selling price = PhP350

We have first to compute for the total selling price of the pork loin. If I need 1.5 kilos for
PhP350 per kilo, the total selling price is:
Total SP=1.5 × 350
Total SP=PhP 525.00

To compute for the trade discount:

Trade Discount=Trade Discount rate ×total selling price
 Trade Discount=7 % ×525
Trade Discount=0.07× 525
Trade Discount=PhP 36.75

The discount I receive from my pork supplier is Php36.75.

Illustrative Example 2.
Compute the discount for an item with a list price of Php1 250.00 subject to a 15%
discount. What is its net invoice price? (Net Invoice price is the amount a product for which
the reseller paid to acquire the product.)
Given:
List Price = PhP1 250.00
Discount rate = 15%

Find: a. Discount (Trade Discount)

b. Net Invoice Price
Solution:
a. Discount=List Price× Discount rate
Discount=PhP1 250.00 ×15 %
Discount=PhP187.50
b. Net Invoice Price =List Price−Discount
Net Invoice Price=PhP1 250.00−PhP 187.50
Net Invoice Price=PhP1 062.50

Illustrative Example 3.
The School Admin ordered the following items from the supplier: 50 pens at PhP24
each, 80 pads of paper at PhP19.75 each, 5 boxes of bond paper at PhP1,123.75 each and 25
clear books at PhP249 each. The supplier gives them a 17% discount. How much will the
total charges be for this order?
Solution: for this example, we need to get the total amount from each item.
a. Pens ¿ 50 × PhP24
¿ PhP1200.00
b. Pad papers ¿ 80 × PhP 19.75
¿ PhP1580.00
c. Bond paper ¿ 5 × PhP1123.75
¿ PhP5618.75
d. Clear books ¿ 25 × PhP 249
¿ PhP6225.00
Now, we will add all the prices and multiplied it to the discount rate:
Total price=1200+1580+5618.75+6225
Total price=PhP 14 623.75
For the trade discount:
Trade Discount=0.17× PhP14 623.75
Trade Discount=PhP 2 486.04
For the total charges:
Total Discount=PhP 14 623.75−PhP 2 486.04
Trade Discount=PhP 12137.71

The School Admin will be billed a total of PhP12 137.71

Illustrative Example 4.
A supplier can cover its cost and earn a reasonable profit if an item is sold at
Php86.75. If he is willing to grant a maximum of 30% discount, how much should the selling
price of this item be?
Solution:
100 %−30 %=70 %(The sale price for the item must be 70% of its original SP.
86.75
Original SP=
0.7
¿ PhP123.93
The original selling price of the item must be at least PhP123.93 .
Series of Discounts
There are times when a supplier also designs discounts to encourage specific behavior
20
from its customer. For instance, a supplier may want to give its distributor a discount of
10/5
. This notation represents a trade discount series. To understand it fully, aside from the
regular 20% discount, a seller may grant a 10% discount if the distributor purchases a
minimum volume of items and special additional discount of 5% if the purchase is paid in
cash.
Is this equivalent to 35% single trade discount?

Let us discover together.

Illustrative Example 5.
Compute for the discount and net invoice price if an item listed at Php1 250.00 is
given a 10% and 5% discount

Given: List Price=PhP1 250.00

Discount rates=10 %∧5 %
Find: a. discount
b. Net Invoice Price
Solution:
We first multiply the price by the first discount rate. To get the second discount,
multiply the difference between the list price and the first discount, and the second discount
rate. We then deduct the second discount from the said difference to get the net invoice price.
 List Price PhP1 250.00
Less 10% (1250 ×10 % ) PhP 125.00
Difference PhP1 125.00
Less 5% (1125 ×5 % ) PhP 56.25
Net Invoice Price PhP1 068.75

Our total Discount is equal to the first discount plus the second discount:
Total Discount=Php 125.00+ PhP56.25
Total Discount=Php 181.25

Is this equivalent to 15% discount?

Php181.25
Single Trade Discount rate equivalent=
PhP1250.00
Single Trade Discount rate equivalent=0.145=14.5 %

10
The trade discount series is only equivalent to a single trade discount of 14.5%, not 15%.
5

Illustrative Example 6.
20/10
If a popular shoe brand promotes this discount for a minimum volume of 250
5
pairs of shoes. Assuming that the unit selling price (list price) of the shoes is PhP2500.00,
compute the Net Invoice price and trade discount per pair that a distributor avails of under
this scheme.
Solution:
Selling Price 2500.00
First trade discount ( PhP2500 × 20 % ¿ 500.00
Difference 2000.00
Second trade discount ( PhP 2000 ×10 % ¿ 200.00
Difference 1800.00
Last trade discount ( PhP1800 ×5 % ¿ 90.00
Net Invoice Price 1710.00

Our total Discount is equal to the first discount plus the second discount plus the last
discount:
Total Discount=Php 500+ PhP200+ PhP 90
Total Discount=Php 790.00

The distributor will be able to avail of a total of Php790.00 of trade discounts if he purchases
a minimum of 250 pairs of shoes.
 Solve the following problems, then collaborate with your classmates in our
group chat.
40
1. A manufacturer sells nipa hut to dealers for PhP94 500.00 with discounts .
10/5
a. Determine the net price of a nipa hut.
b. How much is the total trade discount?
c. What is the equivalent single trade discount for this transaction?

2. Two distributors list the same model of printer at different list prices with differing
8
trade discount series. One lists it at PhP5 697.00 with a trade discount series of
8/5
and free delivery while the other lists the same printer at PhP6 000.00 with a trade
10
discount series of and PhP150.00 delivery charge added to the net price. Which is
5/5
the better deal? Prove your answer by stating the savings made.

3. The Green Lawn Corporation produces a lawn mower, which is priced at PhP34
750.00. A new model is ready for production, so the old model is to be discontinued.
Green Lawn is offering a chain discount of 20% then 10% (20/10). What is the final
net price of the old lawn mower?

A. Read and analyze the following statements. If you think the statement suggests an
incorrect idea, rewrite it on the given space, otherwise leave it blank.
1. A single trade discount is a one-off benefit extended to the buyer when the
individual makes a purchase that meets certain conditions to qualify for the
discount. What different conditions may set to qualify for a discount? Cite 2
conditions.
__________________________________________________________________
_________________________________________________________________.

2. Single trade discount have the same value in a trade discount series.
__________________________________________________________________
_________________________________________________________________.
 B. In your own words, discuss the difference between Single trade discount and trade
discount series.
_____________________________________________________________________
_____________________________________________________________________
_____________________________________________________________________
________________________________________________________________.

A. In your own home, research for a company or a small business that uses Single
trade discount and trade discount series. Explain their ways in doing so.

___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
________________________________________________________.

Multiple Choice. Choose the letter of the best answer. Write the chosen letter on a
separate sheet of paper.
1. Original Price: PhP5,000; Discount rate: 10% ; Net Price: ____?
a. PhP50
b. PhP450
c. PhP550
d. PhP55

2. Merchandise with a list price of PhP1,500.00 is purchased on account for PhP900.00

2 n
on August 1.Terms of sale are , . Payment is made on August 17. The amount
10 30
paid should be
 a. PhP1,500.00
b. PhP600.00
c. PhP900.00
d. PhP882.00

3. A cash discount is offered to encourage prompt payment.

a. True b. False

4. A television that costs PhP18 049.50 is on sale for 75% off. Find the sale price of the
television.
a. PhP13 537.00
b. PhP27,074.25
c. PhP31 586.50
d. PhP4 512.50

5. Find the single discount equivalent to two successive discounts of 20% and 10%
a. 30%
b. 28%
c. 25%
d. 20%

6. An item listed at PhP7 500.00 is subject to the discount series 20%, 10%, and 5%.
Determine the net price.
a. PhP2 512.50
b. PhP3 150.00
c. PhP4 320.00
d. PhP5 130.00

7. A manufacturer can cover its cost and make a reasonable profit if it sells an article
for PhP3 185.00. At what price should the article be listed so that a discount of 30%
can be allowed?
a. PhP3 550.00
b. PhP3 540.00
c. PhP4 550.00
d. PhP5 450.00

1
8. Find the net price for list price PhP4 342.50 less 33 %
3
a. PhP2 605.50
b. PhP3 039.75
c. PhP2 896.45
d. PhP2 909.45

9. Find the net price for list price PhP1 800.00 less 15%;
a. PhP1 550.00
b. PhP1 530.00
 c. PhP1 350.00
d. PhP950.00

10. An item listed at PhP4 000.00 is subject to a trade discount of 25%. Compute
the amount of discount.
a. PhP500.00
b. PhP800.00
c. PhP850.00
d. PhP1 000.00

Do the following to enhance your learning.

1. Choose which of the following stores offers a better price for a car of the same
brand and model listed at PhP385 000.
a. Store A with discount at 35%
b. Store B with discount at 30% and 8%
c. Store C with discount at 30%, 5% and 2%
Answer: ______ Why?
2. Choose which of the following stores offers a better price for a sewing machine of
the same brand and model:
a. Store A: LP = PhP5 380.00 Discount = 25%
b. Store B: LP = PhP5 250.00 Discount = 20% and 5%

Assessment What’s More What I Know

1. B a. PhP48 478.50 1. C
2. C 2. A
b. PhP46 021.50
3. A c. 48.7% 3. B
4. A 4. D
5. B It is better to buy the 5. B
6. D printer from the first 6. A
7. C distributor. This 7. B
8. A allows the buyer to 8. A
9. B save PhP442.66 9. B
10. D 10. D
Final Net Price of
References
Bloomenthal, A. (2020, April 5). Investopedia. Retrieved from Investopedia web site:
https://www.investopedia.com/
Carlson, R. (2019, September 25). Business Finance: Small Business. Retrieved from Small Business:
https://www.thebalancesmb.com
Golubeva, H. (2019, November 03). How To Find A Profitable Product To Sell Online. Retrieved
from XCART: https://www.x-cart.com
Mariano, N. L. (2016). Business Mathematics. Quezon City: REX Book Store.
Nesterenko, N. (n.d.). Vector - Vegetable market 2D vector web banner, poster. 123RF.com. Vector.
Rank, M. (2018). Markup and Discount.
Thomas. (2017). How to calculate margin vs. markup. Retrieved from inflow:
https://www.inflowinventory.com/