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From the two calculations below, which is the right way to calculate the purchase discount line? Is it a percentage from the discounted total, or a percentage from the original total? The first calculation method: Product total = 500 Trade discount = 20% Purchase discount = 2% Transportation = 10% 500 - 100 = 400 400 - 8 = 392 (2% of DISCOUNTED product total) 392 + 50 = 442 The second calculation method: 500 - 100 = 400 400 - 10 = 390 (2% of ORIGINAL product total) 390 + 50 = 440
From the two calculations below, which is the right way to calculate the purchase discount line? Is it a percentage from the discounted total, or a percentage from the original total?
The first calculation method:
Product total = 500
Trade discount = 20%
Purchase discount = 2%
Transportation = 10%
500 - 100 = 400
400 - 8 = 392 (2% of DISCOUNTED product total)
392 + 50 = 442
The second calculation method:
500 - 100 = 400
400 - 10 = 390 (2% of ORIGINAL product total)
390 + 50 = 440
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