a.

Calculate the discount allowed by both companies? (convert your equivalent rate to the nearest
hundredth percent). (Do not round intermediate calculations. Round your answer to the nearest
hundredth percent.)

Discount
Company A

Company B

b.
Which of the following companies, A or B, gives a higher discount? Use the single equivalent discount
rate to make your choice.

Company A
Company B

Complete the following (If more than one discount, assume date of last discount): (Use table 7.1)
(Assuming February will have 28 days.)

Invoice Date goods are received

Terms Last day of

discount period Final day bill is due

November 10

2/10, 1/30, n/60

Complete the following: (Do not round intermediate calculations. Round your final answers to the
nearest cent.)

Amount
of invoice

Terms Invoice date

payment made Date of partial

Amount of

payment to
be credited

Balance

Actual partial

outstanding
$745

3/10, n/60

8/5

$545

8/8

Lucky you! You went to couponcabin.com and found a 25% off coupon to your significant others
favorite store. Armed with that coupon, you went to the store only to find a storewide sale offering 20%
off everything in the store. In addition, your credit card has a special offer that allows you to save 15% if
you use your credit card for all purchases that day. Using your credit card, what will you pay before tax
for the $300 gift you found? Use the single equivalent discount to calculate how much you save and
then calculate your final price. (Do not round intermediate calculations. Round your final answers to the
nearest cent.)

Savings

Final price

Macy of New York sold LeeCo. of Chicago office equipment with a $7,100 list price. Sale terms were
1/10, n/30 FOB New York. Macy agreed to prepay the $20 freight. LeeCo. pays the invoice within the
discount period. What does LeeCo. pay Macy?

Payable amount

Bally Manufacturing sent Intel Corporation an invoice for machinery with a $13,400 list price. Bally dated
the invoice July 28 with 5/10 EOM terms. Intel receives a 40% trade discount. Intel pays the invoice on
August 10. What does Intel pay Bally?

Payable amount

On March 22, Jangles Corporation received a $21,100 invoice dated March 19. Cash discount terms were
3/10, n/30. On March 26, Jangles sent an $8,440 partial payment.

a.
What credit should Jangles receive? (Round your answer to the nearest cent.)

Credit $

b.
What is Jangles outstanding balance? (Round your answer to the nearest cent.)

Outstanding balance $

Assume that markup is based on cost. Find the dollar markup and percent markup on cost for the
following.(Round your "Dollar markup" answer to the nearest cent and "Percent markup on cost" to the
nearest hundredth percent.)

Cost

Selling price

$17.00 $25.80 $

Dollar markup Percent markup on cost

What is the selling price of a dining room set at Macys? Assume actual cost is $800 and 49% markup on
selling price. (Round your answer to the nearest cent.)

Selling price

Calculate the final selling price to the nearest cent and markdown percent to the nearest hundredth
percent:

Original
selling price

First

markdown

Second

markdown

Markup Final

markdown
$6,700 30%

10%

10%

Final selling price

Markdown percent

10%

Calculate the breakeven point and contribution margin.

Breakeven point
per unit

Fixed cost

Contribution margin

units

$9

$107,400

$17

Selling price per unit

Variable cost

Cecil Green sells golf hats. He knows that most people will not pay more than $20 for a golf hat. Cecil
needs a 36% markup on cost. What should Cecil pay for his golf hats? (Round your answer to the nearest
cent.)

Cecil pay

Brownsville, Texas, boasts being the southernmost international seaport and the largest city in the lower
Rio Grande Valley. Ben Supple, an importer in Brownsville, has just received a shipment of Peruvian
opals that he is pricing for sale. He paid $190 for the shipment. Assume he wants a 80% markup.

a.

Calculate the selling price when the markup is based on selling price.

Selling price when the markup is based on selling price $

b.
Calculate the selling price when the markup is based on cost. (Round your answer to the nearest
cent.)

Selling price when the markup is based on cost $

Misu Sheet, owner of the Bedspread Shop, knows his customers will pay no more than $145 for a
comforter. Misu Sheet wants to advertise the comforter as "percent markup on cost."

a.

What is the equivalent rate of percent markup on cost compared to the 20% markup on selling
price?(Round your answer to the nearest hundredth percent.)

Rate of percent

b.

Is this a wise marketing decision?

Yes
No

Jane Corporation produces model toy cars. Each sells for $23.90. Its variable cost per unit is $11.43.
Assuming it has a fixed cost of $386,570. What is the breakeven point for Jane Corporation?

Breakeven point

units

Complete the following table (assume the overtime for each employee is a time-and-a-half rate after 40
hours): (Do not round intermediate calculations. Round your "overtime rate" and "gross earnings" to the
nearest cent.)

Employee
regular
hours Total
overtime

Th

Sa

Total

hours Regular
rate

Overtime

rate

Gross

earnings
Maloney

10

$7.50 $

Calculate the gross earning for an apple picker based on the following differential pay scale: (Round your
answers to the nearest cent.)

11,000: $0.03 each

Apple picker

Number of

apples picked Gross earning

1,975 $

1,0011,600: $0.05 each

Over 1,600: $0.07 each

A Publishing Company pays its salespeople a weekly salary plus a 2% commission on all net sales over
$5,000 (no commission on returned goods):

Complete the following table:

Employee
sales

Gross

Return

Net

sales Given
quota

Commission

sales Commission
rate

Total

commission
wage

Regular

Total

wage
Sanders $7,825 $25

$5,000 $

2%

$230

Assume a tax rate of 6.2% on $110,100 for Social Security and 1.45% for Medicare. No one will reach the
maximum for FICA. Complete the following payroll register. (Use the percentage method to calculate FIT
for this weekly period.) (Use Table 9.1 and Table 9.2). (Do not round intermediate calculations. Round
your final answers to the nearest cent.)

FICA
Employee

Marital

status Allowances
claimed Gross pay

FIT

Net pay
S.S.
Mike Rice

Med.
M

$1,000 $

Given the following, calculate the state (assume 5.3%) and federal unemployment taxes that the
employer must pay for each of the first two quarters. The federal unemployment tax is 0.8% on the first
$7,000. Both state and federal unemployment taxes apply to the first $7,000 only. (Round your answers
to the nearest cent.)

PAYROLL SUMMARY

Quarter 1
Bill Adams

Quarter 2
3,650

7,750

Rich Haines

7,850

14,800

Alice Smooth

3,050

3,950

PAYROLL SUMMARY

Quarter 1

Quarter 2

Total $

SUTA $

FUTA $

Rhonda Brennan found her first job after graduating from college through the classifieds of the Miami
Herald. She was delighted when the offer came through at $21.00 per hour. She completed her W-4
stating that she is married with a child and claims an allowance of 3. Her company will pay her biweekly
for 80 hours (assume a tax rate of 6.2% on $110,100 for Social Security and 1.45% for Medicare).

Calculate her take-home pay for her first check. (Use Table 9.1 and Table 9.2) (Round your answer to the
nearest cent.)

Net pay

Maggie Vitteta, single, works 34 hours per week at $11 an hour. How much is taken out for federal
income tax with one withholding exemption? (Assume the overtime for each employee is a time-and-ahalf rate after 40 hours.) (Use Table 9.1 and Table 9.2) (Round your answer to the nearest cent.)

Amount

Richard Gaziano is a manager for Health Care, Inc. Health Care deducts Social Security, Medicare, and
FIT (by percentage method) from his earnings. Assume a rate of 6.2% on $110,100 for Social Security
and 1.45% for Medicare. Before this payroll, Richard is $1,000 below the maximum level for Social
Security earnings. Richard is married, is paid weekly, and claims 2 exemptions.

What is Richards net pay for the week if he earns $1,200? (Use Table 9.1 and Table 9.2). (Round your
answer to the nearest cent.)

Net pay

Westway Company pays Suzie Chan $3,400 per week. Assume Social Security is 6.2% on $110,100 and
1.45% for Medicare.

a.
By the end of week 51, how much did Westway deduct for Suzie's Social Security and Medicare for the
year? (Round your answers to the nearest cent.)

Deductions
Social security $
Medicare

b.
What state and federal unemployment taxes does Westway pay on Suzie's yearly salary? The state
unemployment rate is 5.1% and the federal unemployment tax is 0.8% on the first $7,000.

Payment
State unemployment taxes

Federal unemployment taxes $

Morris Leste, owner of Carlson Company, has three employees who earn $410, $725, and $880 per
week. What are the total state and federal unemployment taxes that Morris owes for the first 11 weeks
of the year and for week 30? Assume a state rate of 5.6% and a federal rate of 0.8%. (Leave no cells
blank - be certain to enter "0" wherever required. Round your answers to the nearest cent.)

State taxes owed

Federal taxes owed

Taxes owed for week 30

Calculate the simple interest and maturity value. (Do not round intermediate calculations. Round your
answers to the nearest cent.)

Principal

Interest rate

Time

Simple interest Maturity value

$17,700

formula38.mml 20 mo. $

Solve for the missing item in the following.

Principal

Interest rate

$720

years $144

5%

Time

Simple interest

Given Principal: $8,000, 7%, 240 days

On 100th day, $3,400

On 180th day, $2,300

a.
Use the U.S. Rule to solve for total interest cost. (Use 360 days a year. Do not round intermediate
calculations. Round your answer to the nearest cent.)

Total interest cost

b.
Use the U.S. Rule to solve for balances. (Use 360 days a year. Do not round intermediate calculations.
Round your answer to the nearest cent.)

On 100th day On 180th day

c.
Use the U.S. Rule to solve for final payment. (Use 360 days a year. Do not round intermediate
calculations. Round your answer to the nearest cent.)

Final payment $

The time of a loan could be expressed in months, years, or days.

True
False

The time of a loan could be expressed in months, years, or days.

True
False

Ordinary interest is never used by banks.

True
False

In the U.S. Rule, the partial payment first covers the interest and the remainder reduces the principal.

True
False

Interest of $1,632 with principal of $16,000 for 306 days (ordinary interest) results in a rate of:

10%
12%
12 1/2%
13%
None of these

The number of days between Aug. 9 and Jan. 3 is:

145
144
147
148
None of these

Jim Murphy borrowed $30,000 on a 120-day 14% note. Jim paid $5,000 toward the note on day 95. On
day 105 he paid an additional $6,000. Using the U.S. Rule, Jim's adjusted balance after the first payment
is:

$25,000
$28,891.67
$1,108.33
$26,108.33
None of these

On May 17, Jane took out a loan for $33,000 at 6% to open her law practice office. The loan will mature
the following year on January 16. Using the ordinary interest method, what is the maturity value due on
January 16?
rev: 08_24_2013_QC_ 34268

$34,342

$34,320
$34,323.62
$34,254
None of these

Bill Moore is buying a used Winnebago. His April monthly interest at 7.80% was $84.50. What was Bills
principal balance at the beginning of April? (Use 360 days a year. Do not round intermediate
calculations.)

Principal balance

Max Wholesaler borrowed $13,500 on a 11%, 120-day note. After 45 days, Max paid $4,725 on the note.
Thirty days later, Max paid an additional $4,050. Use ordinary interest.

a.

Determine the total interest use the U.S. Rule. (Do not round intermediate calculations. Round your
answers to the nearest cent.)

Total interest amount $

b.

Determine the ending balance due use the U.S. Rule.(Do not round intermediate calculations.Round
your answers to the nearest cent.)

Ending balance due

Leslie Hart borrowed $15,200 to pay for her childs education at Riverside Community College. Leslie
must repay the loan at the end of 10 months in one payment with 1formula12.mml interest.

a.

How much interest must Leslie pay? (Do not round intermediate calculation. Round your answer to the
nearest cent.)

Interest

b.

What is the maturity value? (Do not round intermediate calculation. Round your answer to the nearest
cent.)

Maturity value $