Net Price

A net price is the value at which a product or service is sold after all taxes and other cost are
added and all discounts subtracted. Net price is what the seller’s customer’s pay.

Wholesalers

A person or firm that buys large quantity of goods from various producers or vendors,
warehouses them, and resellers to retailers.

Retailer

A business or person that sells goods to the consumer as opposed to a wholesaler or

supplier, who normally sell their goods to another business.

Distributor

An entity that buys noncompeting products or product lines, ware house them, and resells
them to retailer or direct to the end users or customer. Most distributors provide strong non-
power and cash support to the supplier or manufacturer’s promotional efforts. They usually
also provide a range at services (such as product information, estimates, technical support,
after-sales services, credits) to their customers.

Manufacturer

Entity that makes a good through a process involving raw materials, components, or
assemblies, usually on a large scale with different operations divided among different workers.
Commonly used interchangeably with producer.

Consumers

A purchaser of a good or service in retail. An end user, and not necessarily a purchaser, in
the distribution chain of a good or service. See also customer.

Merchandise

Household, personal use, or commercial goods, wares, commodities, bought and sold in
wholesale and retail.

Merchandising

The activity of promoting the sale of goods at retail. Merchandising activities may include
display techniques, free samples, on-the-spot demonstration, pricing, shelf talkers, special
offers, and other point-of-sale methods. According to American Marketing Association,
merchandising encompasses "planning involved in marketing the right merchandise or service
at the right place, at the right time, in the right quantities, and at the right price."

Trade Discount

A trade discount is the amount by which a manufacturer reduces the retail price product
when it sells to a reseller, rather than to the end customer. A trade discount is also known as a
functional discount.

The two traditional methods for computing trade discount are the discount method and
complement method.

STEPS TO COMPUTE NET PRICE WITH THE DISCOUNT METHOD

Step 1: Multiply the discount rate by the list price to get the discount amount

Trade Discount (TD) = List Price (LP) x Trade Discount Rate (TDR)

Or

TD=LP x TDR

Step 2: Subtract the discount from the list price to get the net price

Net Price (NP) = List Price (LP) – Trade Discount (TD)

Or

NP=LP – TD

EXAMPLES

1-7 Find the net price of the trade discount

1.) A 25% discount allowed to a bag amounted to Php 15,500. What was the net price?

2.) Lisa sold her coat to a price of Php 4,500 with a discount of 15%. What was her net
price?

3.) 3.)Ali will buy a box of canned tuna that lists for Php 750 and has a trade discount of
15%. How much is the net price?
 4.) Johnson Auto Repair Shop is purchasing an ignition module for a sport coupe that is
six years old. The list price in the wholesaler’s catalogue is Php 845 and receives a
40% trade discount. What is the net price of the module?

5.) Find the net price of a bed sheet that lists for Php 800 and has a trade discount of
15%.

6-10 find the rate of the trade discount

6.) A car with a list price of Php 250,000 was sold to retailer with Php 180,000. What
was the rate of trade discount?

7.) Set of shoes with a list price of Php 8,000 was sold to a retailer for Php 6,500. What
is rate of trade discount is given?

8.) A pair of speaker listed a price of Php 10,000 was sold to a retailer for Php 8,000.
What is the rate of trade discount is given?

9.) A watch that is trade discount of Php 357 to a listed price of $500. What is the rate
that given?

10.) A motor accessory listed at Php 3,600. Has a net price of Php 600. What is the
rate of discount?

Answer:

1.Given: Solution;

LP= Php 30,000 TD= TDR x LP NP= LP – TD

TDR= 25% TD= 0.25 x 15, 500 NP= 15,500 – 3,875

UN= NP TD= Php 3,875 NP= Php 11,625

2. Given: Solution;

LP= Php 4,500 TD=TDR x LP NP=LP – TD

TDR= 15% TD= 0.15 x 4,500 NP= 4,500 – 675

UN= NP TD=Php 675 NP= Php 3,875

3. Given: Solution;

LP= Php 750 TD=TDR x LP NP= LP – TD

TDR= 15% TD= 0.15 x 750 NP= 750 – 112.5

UN= NP TD= Php 112.5 NP= Php 637.5

4. Given: Solution;

LP= Php 845 TD= TDR x LP NP= LP – TD

TDR= 40% TD= 0.40 x 845 NP= 845 – 338

UN= NP TD= Php 338 NP= Php 507

5. Given: Solution;

LP= Php 800 TD= TDR x LP NP= LP – TD

TDR= 15% TD= 0.15 x 800 NP= 800 – 120

UN= NP TD= Php 120 NP= Php 680

6.) Given: Solution;

LP = Php 250,000 TD = TDR x LP

180,000=𝑇𝐷𝑅 𝑥 250,00
TD = Php 180,000 250,000 250,000

UN = TDR TDR= 0.72 or 72%

7.) Given: Solution;

LP= Php 8,000 TD= TDR x LP

6,500=𝑇𝐷𝑅 𝑥 8,000
TD= Php 6,500 8,000 8,000

UN= TDR TDR= 0.8125 or 81.25%

8.) Given: Solution;

LP= Php 10,000 TD= TDR x LP

8,000=𝑇𝐷𝑅 𝑥 10,000
TD= Php 8,000 10,000 10,000

UN=TDR TDR= 0.8 or 80%

9.) Given: Solution;

LP= Php 500 TD= TDR x LP

357=𝑇𝐷𝑅 𝑥 500
TD=%357 500 500

UN=TDR TDR= 0.75 or 75%

10.) Given: Solution;

LP= Php 3,600 TD = TDR x LP

3,000=𝑇𝐷𝑅 𝑥 3,600
TD= Php 3,000 3,600 3,600

UN=TDR TDR= 0.833333333

TDR ≈ 0.83 or 83%

STEPS TO COMPUTE NET PRICE WITH THE COMPLEMENT METHOD

Step 1: Subtract the discount rate from 100% to get the complement rate

Complement Rate (CR) = 100% - Trade Discount Rate (TDR)

Or

CR = 100% - TDR

Step 2: Multiply the complement rate by the list to get the net price

Net Price (NP) = Complement Rate (CR) – List Price (LP)

Or

NP = CR – LP

Examples:

1. A computer that list for Php 20,950 and has a trade discount of 35%. Find the net price
using complement method.

2. The list price of gas stove is Php 1,700 with a 27% discount to wholesalers. Find the net
price using the complement method.

3. Atleta shop sells a certain brand of tennis racket shop for Php 900 below the suggested
retail price. Atleta shop claims that this represents a 40% discount. Find the SRP using
complement method.

4. A charger that listed of Php 750 is offered at a discount of 29%. Find the net price using
complement method.

5. A 35.5% trade discount on a camera represents a discount of Php 45,500 from the
suggested retail price. What is the net price to the buyer using complement method?

6. A clothing store is able to purchase men’s leather coats at Php 6,999. What rate of trade
discount was obtained using complement method?

7. After a trade discount of 25%, a garage is able to purchase windshield wiper blades from
a net price of Php 950. What is the list price of the blades using complement method?
 8. The distributor of Nikita power tools is offering a trade discount of 35% to hardware
store in the list price of Php 9,750. What was there net price using complement
method?
9. The Rainbow Appliance Center purchased an order of dishwashers and ovens listing for
Php 36,800. The manufacturer allows Rainbow a trade discount of 25%. What was their
net price using complement method?

10. Audio Giant received an order of Sirius XM satellite radios listing for Php 25,000 with a
trade discount of 20%. What was the net price using complement method?

Answer:

1.) Given: Solution;

LP= Php 20,950 CR= 100% - TDR NP= LP x CR

TDR= 35% CR= 100% - 35% NP= 20,950 x 0.65

UN= NP CR= 65% or 0.65 NP= Php 13,617.5

2.) Given: Solution;

LP= Php 1,700 CR= 100% - TDR NP= LP x CR

TDR =27% CR= 100% - 27% NP= 1,700 x 0.73

UN = NP CR= 73% or 0.73 NP= Php 1,241

3.) Given: Solution;

LP= Php 900 CR=100% - TDR NP= LP x CR

TDR=40% CR= 100% - 40% NP= 900 x 0.60

UN = NP CR= 60% or 0.60 NP= Php 540

4.) Given: Solution;

LP= Php 750 CR= 100% - TDR NP= LP x CR

TDR= 29% CR= 100% -29% NP= 750 x 0.71

UN=NP CR= 71% or 0.71 NP= Php 532.5

5.) Given: Solution;

LP= Php 45,500 CR=100% - TDR NP= LP x CR

TDR= 35.5% CR= 100% - 35.5% NP= 45,500 x 0.655

UN=NP CR= 65% or 0.655 NP= Php 29,835.25

6.) Given: Solution;

LP= Php

TDR=

UN=NP

7.) Given: Solution;

NP= Php 950 NP= LP x CR CR= 100% - TDR

TDR= 25%

UN=LP

8.) Given: Solution;

LP= Php 9,750 CR=100% - TDR NP= LP x CR

TDR= 35% CR= 100% - 35% NP= 9,750 x 0.65

UN=NP CR= 65% or 0.65 NP= Php 6,337.5

9.) Given: Solution;

LP= Php 36,800 CR=100% - TDR NP= LP x CR

TDR= 25% CR= 100% - 25% NP= 36,800 x 0.75

UN=NP CR= 75% or 0.75 NP= Php 27,600

10.) Given: Solution;

LP= Php 25,000 CR=100% - TDR NP= LP x CR

TDR= 20% CR= 100% - 20% NP= 25,000 x 0.80

UN=NP CR= 80% or 0.80 NP= Php 20,000

Trade Discount Series

Examples

1. A television is listed for Php 40,000 less 35%, 30%, and 25%. What is the net price using
discount method?
2. A car is listed for Php 350,000 less 25%, 20%, and 15%. What is the net price using
discount method?
3. A tool set lists for Php 3,500 and has a trade discount series of 20%, 15%, and 10%. Find
the net price using discount method.
 4. A dress shirt lists for Php 550 and has a trade discount series of 15%, 10%, and 5%. Find
the net price using discount method.
5. The list price of a winter coat is Php 7,000 and offered a discount series to 35%, 30%,
25%. Find the net price using discount method.
6. A manufacturer sells kayaks to a dealers at a list price of Php 15,550 less 40%, 30%, and
25%. Determine the net price using complement method.
7. A mobile phone is listed Php 13,500 less 10%, 7%, 5%. What is the net price using
complement method?
8. A jewellers sells diamond necklace for Php 350,000 less 35%, 30%, and 25%. What was
the net price using complement method?
9. Kidstaff offered toys, games and videos from the vendor. The order had a list price of
Php 10,500 less trade discount 20%, 15%, and 13%. What was there net price using
complement method?
10. Legacy Design places an order for furniture listing price Php 25,550 less trade discount
of 25%, 20%, and 17%. What was the net price using complement method?

Answers:

1.) Given

LP= Php 40,000

UN=NP

1st discount 2nd discount 3rd discount

Step 1: 40,000 x 0.35 26,000 x 0.30 16,900 x 0.25
= Php 14,000 =Php 9,100 = Php 4,225
Step 2: 40,000 – 14,000 26,000 – 9,100 16,900 – 4,225
=Php 26,000 = Php 16,900 =Php 12,675
=Net price

2.) Given

LP= Php 350,000

UN= NP
 1st discount 2nd discount 3rd discount
Step 1: 350,000 x 0.25 262,500 x 0.20 196,875 x 0.15
=Php 87,500 = Php 65,625 = Php 29,531.25
Step 2: 350,000 – 87,500 262,500 – 65,625 196,875 – 29,531.5
= Php 262,500 =Php 196,875 =Php 167,343.75
=Net Price

3.) Given

LP= Php 3,500

UN= NP

1ST Discount 2nd Discount 3rd Discount

Step 1 3,500 x 0.20 2,800 x 0.15 2,380 x 0.10
=Php 700 =Php 420 =Php 238
Step 2 3,500 - Php 700 2,800 – 420 2,380 – 238
=Php 2,800 =Php 2380 =Php 2,142
=Net Price

4.) Given

LP= Php 550

UN=NP

1st Discount 2nd Discount 3rd Discount

Step 1 550 x 0.15 467.5 x 0.10 420.75 x 0.005
=Php 82.5 =Php 46.75 =Php 21.0375
Step 2 550 – 82.5 467.5 – 46.75 420.75 – 21.0375
=Php 467.5 =Php 420.75 =Php 399.7125
=Net Price

5.) Given

LP= Php 7,000

UN=NP

1st Discount 2nd Discount 3rd Discount

Step 1 7,000 x 0.35 4,550 x 0.30 3,185 x 0.25
=Php 2,450 =Php 1,365 =Php 795.25
 Step 2 7,000 – 2,450 4,550 – 1,365 3,185 – 795.25
=Php 4,550 =Php 3,185 =Php 2,389.75
=Net Price

6.) Given

LP= Php 15,550

UN=NP

1st Discount 2nd Discount 3rd Discount

Step 1 100% - 40% 100% - 30% 100% - 25%
= 60% = 70% =75%
Step 2 15,550 x 0.60 9,330 x 0.70 6,531 x 0.75
=Php 9,330 =Php 6,531 =Php 4,898.25
=Net Price

7.) Given

LP= Php 13,500

UN=NP

1st Discount 2nd Discount 3rd Discount

Step 1 100% - 10% 100% - 7% 100% - 5%
=80% =93% =95%
Step 2 13,500 x 0.80 10,800 x 0.93 10,004 x 0.95
=Php 10,800 =Php 10,004 =Php 9,541.8
=Net Price

8.) Given

LP= Php 350,000

UN=NP

1st Discount 2nd Discount 3rd Discount

Step 1 100% - 35% 100% - 30% 100% - 25%
=65% =70% =75%
Step 2 350,000 x 0.65 227,500 x 0.70 159,250 x 0.75
 =Php 227,500 =Php 159,250 =Php 119,437.5
=Net Price

9.) Given

LP= Php 10,500

UN=NP

1st Discount 2nd Discount 3rd Discount

Step 1 100% - 20% 100% - 15% 100% - 13%
=80% =85% =87%
Step 2 10,500 x 0.80 8,400 x 0.85 7,140 x 0.87
=Php 8,400 =Php 7,140 =Php 6,211.8
=Net Price

10.) Given

LP= Php 25,550

UN=NP

1st Discount 2nd Discount 3rd Discount

Step 1 100% - 25% 100% - 20% 100% - 17%
=75% =80% =83%
Step 2 25,550 x 0.75 19,162.5 x 0.80 15,330 x 0.83
=Php 19,162.5 =Php 15,330 =Php 12,723.0
=Net Price
Commission

Mutually agreed upon, or fixed by custom or law, fee accruing to an agent, broker, or
salesperson for facilitating, initiating, and/or executing a commercial transaction. Payment
used mainly for salespeople.

Those who entire pay is through commission are said to work on straight
commission. Those who receive a base salary plus a commission said to work on a salary-
plus-commission basis.

STEPS TO COMPUTE COMMISSION AND TOTAL PAY

Step 1: Multiply the commission rate by the amount sold to get the amount

Commission (C) = Amount Sold (AS) x Rate of Commission (RoC)

Or

C=AS x RC

Step 2: If there is a salary, add it to the commission amount to get the total gross pay

Total Gross Pay (TGP) = Salary (S) + Commission (C)

Or

TGP = S + C

Examples:
1.) Elsa sells a furniture and is paid 8% of her total sales as omission. Her sales totalled to
Php 20,000. How much is Irene’s commission in a week.
2.) Johnny sells a used laptop for Php 15,000. His commission is 7%. What will be his
commission for the sale?
3.) If a salesperson receives a 10% commission on their sales and sells Php 2,500 worth of
merchandise. What will be his commission on sale?
4.) Carmen works is an appliance store. She is paid a 6% commission rate on all appliances
that she sells. What is her commission on sale of a television set that costs Php 45,500?
5.) Maicelle receives 20% commission on the books that she sells Math Book for Php 750,
Science Book for Php 1,750 & English Book for Php 2,000. How much does Maicelle
make in commission?
6.) A clerk sold Php 4,000 in merchandise in 1 week. If he received a commission of Php
150. What was the rate of commission?
7.) The commission on the sale of a Php 1,500 video camera is Php 200. What was the
commission rate?
8.) If a saleswoman is paid a Php 200 commission on the sale of a Php 3,000 curtain. What
is the commission rate?
9.) A telemarketer earns Php 400 per week plus 15% commission on sales. Find her total
pay for a week in which her sales were Php 1,200.
10.) Irene, a computer saleswoman is paid a retainer’s fee of Php 5,750 per week,
plus a commission of 10% of the profits made by the company on computers that she
sells. How much does she earn in a week if Php 17,500 profit was generated her sales?
11.) A car sales agent is paid a monthly salary of Php 7,500 plus commission. Last
month she sold one sports car for Php 65,500, earning a 10% commission on the sale.
How much was her commission? What was her total pay last month?
12.)

Answers:

1.) Given; Solution;

AS= Php 20,000 C = AS x RoC
RC= 8% C= Php 20,000 x 0.08
C= Php 1,600

2.) Given;
AS= Php 15,000 C= AS x RC
C= RC= 7% C= Php 15,000 x 0.07
 C= Php 1,050

3.) Given;
AS= Php 2,500 C= AS x RC
RC= 10% C= Php 2,500 x 0.10
C= Php 250

4.) Given;
AS= Php 45,500 C= AS x RC
RC= 6% C= Php 45,500 x 0.06
C=Php 2,700

5.) Given;
AS= Php 4,500 C= AS x RC
RC= 20% C= Php 4,500 x 0.20
C= Php 900

6.) Given;
AS= Php 4,000 C= AS x RC
𝑃ℎ𝑝 150= 𝑃ℎ𝑝 4,000 𝑥 𝑅𝐶
C= Php 150 4,000 4,000
RC= 0.0375 or 3.75%

7.) Given;
AS= Php 1,500 C= AS x RC
𝑃ℎ𝑝 250=𝑃ℎ𝑝 1,500 𝑥 𝑅𝐶
C= Php 250 1,500 1,500
RC= 0.166666666 or ≈ 0.166
RC=16.6%

8.) Given;
AS= Php 3,000 C= AS x RC
𝑃ℎ𝑝 200 = 𝑃ℎ𝑝 3,000 𝑥 𝑅𝐶
C= Php 200 3,000 3,000
RC= 0.066666666 or ≈ 0.066
RC= 6.6%

9.) Given;
 AS= Php C= AS x RC TGP= S + C
RC= C= Php TGP= Php + Php
C= Php C= Php TGP= Php

10.) Given;
AS= Php 17,500 C= AS x RC TGP= S + C
RC= 10% C= Php 17,500 x 0.10 TGP= Php 5,750 + Php
S= Php 5,750 C= TGP=

11.) Given;
AS= Php
RC=
S=