Maruko makes a dryer that it sells to retailers for List $1,200 less 20% and 14%

Accounting Sep 01, 2020

Maruko makes a dryer that it sells to retailers for List $1,200 less 20% and 14%. What single discount rate is equivalent to the two chained discounts?

Expert Solution

Computation of Single Discount Rate equivalent to the two chained discounts:

First discount is 20% of $1,200 = $240

Revised price = $1,200-$240 = $960

Second discount is 15% of $960 = $144

Revised price = $960 - $144 = $816

Total discount = $1,200 - $816 = $384

Single Discount Rate = ($384*100)/$1,200 = 32%

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