Chapter 10

Sales and Marketing

10-1 Cash Sales and Sales on
Account
 Proving Cash
 Most cash registers are really computer terminals
with a display screen and a scanner that is
connected to a computer.
 The scanner reads bar codes that tells what
department, how many, what size and what
product is purchased.
 Computers/Cash registers also calculate sales tax,
totals the sale and updates inventory records
 Proving Cash – counting the money in the drawer
and checking this amount against the cash
register readings to see if the right amount is
there.
Why do we have to
prove cash?
 Every cash register needs to have start up
cash…this is referred to as your cash fund or
start up cash.
 If you have more cash than you should, your
are cash over, if you have less cash than you
should then you are cash short.
 EX: Gretchen works as a cashier for Tops. When she
started work, she put $100 in her cash register
drawers at the end of her work period, her register
readings should total cash received $4,672.98, and
total cash paid out, $68.42. When she counted the
cash in her drawer, she found $4,702.56. Was she
over or short?
 She is short by $2.00

 Do A & B on page 419

Sales Invoice and Credit
Memo
 When a seller sells goods to a buyer on credit, the
seller gives the customer a sales invoice.
 A sales invoice lists the good sold and delivered to
the buyer. The buyer calls this form a purchase
invoice…invoice is the same thing as a bill.
 Credit Memo – when you buy something on credit
and you need to return it, then the company gives
you a credit memo…this amount can be deducted
from your bill.
 Do C & D on page 421
 Customer Account Balance
 Most people use cash or credit to purchase
items, however, businesses generally let
people purchase items on credit or on
account.
 At the end of the month bills are then paid
for all purchases and credits….you need to
keep track of all bills and credits.
 Look at page 131 in workbook… and do it
together..
Open Textbooks to page
422-423 and get scrap
paper out.

Working with your table

partner, answer the
following questions:
Page 422 (E-F)
E. $784.83
F. $13,028
Please sit where your
name is and get out the
following:
Whiteboard, marker, rag

Notebook w/ paper

Calculator

Pen/Pencil
Warm Up..(show ALL work on white boards
and circle answer)
At the start of the day, March 6, Marsha
put $100 change fund in her cash register.
The cash register readings at the and of
the day showed total cash received,
$3,283.86, and total cash paid out, $45.31.
The cash in the register at the end of the
day was $3,338.37. Was the cash drawer
over or short and by how much?
$.18 short
Warm Up..(show ALL work on white boards
and circle answer)
Annette had $140 in changed in her cash
register at the start of work on March 19.
At the end of her work period, there was
$2,961.19 in the cash register. The
register totals showed that she received
$2,983.27 and paid out $159.76 during the
period. How much was the cash over or
short?
$2.32 short
Warm Up..(show ALL work on white boards
and circle answer)
Risco Products sold these items to
Sponson’s Flooring:
60 cases of floor tile @ $24.54 a case

12 gallons of adhesive @ $31.89 a gallon

12 tile cutters @ $48.23 each

What was the total of the sales invoice?

$2,433.84
Using your
whiteboards and your
table partner, list any
incentives a company
could give so they get
their bill paid sooner.
If the bookstore
received an invoice
dated 3/15 and the
terms were net 10,
what date should the
bill be paid by?
10-2 Cash and Trade
Discounts
 Most business to business transactions
begin with a purchase order…this is a
form from the buyer that states all the
details of the purchase and confirms
money has been designated for this
purchase.(it is an order for a purchase)
 Most businesses get 30 days to pay a
bill..this is called the credit period.
10-2 Cash and Trade
Discounts
 Cash discounts – a discount given to people
to encourage them to pay their invoices
early…usually expressed as 1/30…this means
a person will get a 1% discount if their bill is
paid within 30 days
 You may also see 5/10, n/30..this means you
will get a 5% discount if paid within the next
10 days or the whole thing is due within 30
days.
 I was given an invoice dated 5/11 from KDH
Imprint for 40 monogrammed sweatshirts
they sold me at $25.50 each. The terms on
the invoice were 10/10, n/30.
1. What is the last date my bill is due?
• June 10th
2. What is the last date my bill is due that I
can still get a discount?
• May 21st
3. If I paid my invoice on 5/16, what should I
owe?
• 40 * $25.50=$1,020
• $1,020 * .1 = $102
• $1,020 – $102 = $918.00
10-2 Cash and Trade
Discounts
 Trade Discounts – these are reductions
from the list price to their business
customers. Different discounts may
apply to different customers and
different products. Sometimes it is
because they order a lot of products,
sometimes it is to get rid of a product.
3. If I have an invoice for $560.00 and I
get a trade discount of 25% plus
8.75% tax, what is the total amount I
owe on the invoice?
• Find discount…560 * .25 = $140
• $560 – 140 = $420
• Apply tax.. $420 * .0875 = $36.75
• Add taxes and pay bill $420 + $36.75 =
$456.75
Homework…
Page 132 in
workbook…this will be
graded tomorrow.
Rate of Discounts
 Rate of Discounts – this is similar to asking
what the % decrease is….take the difference
between the list price and the discount price
and then divide it by the list price.
 Ex: An invoice totaling $5,200 was paid
within the discount period. The amount paid
was $5,070. What was the rate of cash
discount…
 5,200-5,070 =130
 130/5,200 = .025 or 2.5%
 Ex: A swimsuit with a list price of $75
was sold to a retailer for $41.25. What
was the amount and rate of trade
discount?
 $75 - $41.25 = $33.75
 $33.75 / $75 = .45 or 45%
Let’s look at your homework

Workbook page 132

 Get out notebook and write
the following vocabulary
words down…
 Cash discount – a discount given as
an incentive to pay the invoice
early.
 Trade discount – a discount given
to certain customers because they
do a lot of business together.
10-3 Series Discounts
 Some wholesalers may give a trade discount
that has two or more discounts, called a
discount series or a series of discounts.

 EX: The trade discount may be 20%, 15%,

10%. The means that three discounts are
applied one after the other.
If I have an invoice for $640.00 and I get a
series discount of 15%, 10%, what is the
final amount that I owe on this invoice?

Here are the steps to calculate:

 $640 * .15 = $96.00
 $640 – $96 = $544
 $544 * .10 = $54.40
 $544 – $54.40 = $489.60
 (Is there an easier way to calculate?)
 640 * .85, then * .90 = $489.60
 Why don’t they just give a 25% discount?
 Because then they would be giving a
total of $160 which = $480.00
 Ex. The list price of a display case is
$2,100, less 25%, 10%, and 5%. Find the
invoice price and the amount of trade
discount.

1. $2,100 * 25% = 525

2. 2,100 – 525 = $1,575.00
3. $1,575 * 10% = 157.50
4. $1,575 - $157.50=$1,417.50
5. $1,417.50 * 5% = $70.875
6. $1,417.50 – 70.875 =
1,346.625…1,346.63(invoice price)
7. $2,100 – 1,346.63 = 753.37…trade discount
amount.
Homework…
 Pages 133-134 in workbook…only #1-4
What is….???
 An Invoice?
 A Credit memo?
 Proving Cash?
 List 5 things on an invoice
 What does keeping a customer account
mean?
 What is a cash discount?
 What is a trade discount?
 What is a series discount?
10-4 Markup and Markdowns
 One way businesses price items is to use
markup pricing.
 An amount is added to the cost of the goods
to cover all other expenses plus a profit.
 This amount is known as markup.
 The selling price is the price at which the item
is actually sold.
 Markup and Markdowns
 Lisa owns a luggage store and has to buy carry-on
luggage for a line she sells for $90. She knows that
her markup must be 40% of the selling price to
cover expenses and get the net income she wants.
What is the highest price she can afford to pay for
each piece of luggage?
 There are 2 methods:

 1. Subtract the markup rate from 100% to find the

cost as a percent and multiply the selling price by the
cost as a percent to find the cost..
 100% - 40% = 60%
 60% x $90 = $54
 2. Multiply the selling price by the markup rate to
find the markup., then subtract the mark up from the
selling price to find the cost.
 40% x $90 = $36
 $90-$36 = $54
 A wholesaler want to sell a drill
to retailers for $45 and earn a
markup of 20% on the selling
price. What is the most the
wholesaler can pay for a drill
and get the desired markup?
 100% -20% = 80%
 45 *.80 = $36.00
 Marion, a jeweler, wants to set
a price of $600 for a bracelet.
The markup he wants is 60% of
the selling price. What is the
most he can pay for the
bracelet?
 100% - 60% = 40%
 $600 * .40 = $240
 Markup and Markdowns
 Markdown – is generally what we have considered
a discount.
 It is a percentage of a marked price.
 To move an overstocked item, a discount of 15% is
given on a backpack with a marked price of $70.
Find the amount of the discount and the selling
price.
 70 * .15 = 10.50
 $70 – 10.50 = $59.50
 Markup and Markdown review
questions:
 1. As the buyer for Rezden
Electronics, you are buying a travel
alarm clock for a line that sells at
$11.98. What is the most you can
pay for the clock and maintain a
markup of 45% of the selling price?
 100 - .45 = .55
 .55 * 11.98 = $6.59
 Your store sells two-way radio sets
in two price lines.
 An inexpensive set sells for $59.50.
A better radio set with more
features sells for $115. What is the
highest cost price you can pay for
each of these lines and make a
markup of 48% of the selling price?
 $59.50 = $30.94
 $115 = $59.80
 Markdowns:
 A man’s suit with a marked price of
$270 is being offered at a 20%
discount. What is the selling price?
 $216.00
 At the end of the selling season a
flat of flowers marked at $12.50 is
discounted 35%. What is the
selling price of the flat?
 $8.12
 Review of % increase/decrease and
markup/markdown…

 Castle Learning Assignment…due

tomorrow, Wed. May 8th.

 **** You must try to do all

incorrect questions and read the
help they give you!!
10-5 Marketing Surveys
 Population – all the people in an
organization or those surveyed.
 Sample population – part of the total
population that were surveyed.
 Demographic data - includes data such as
age, sex, education, marital status,
occupation and income.
 Respondents – people who answer surveys
 Valid – when all questions are properly
answered and collected.
 Page 445-446 #A -#D
 A. 62%
 B. 58,400; 73%
 C. 16.8%
 D. 9.2%
 Page 447
 5. 133; 62.1%
 6. 714
 7. 40.6%
 Homework/Partner work…
 Page page 137 #12-14 only and page
138.
 Also due tomorrow – Castle Learning
Markup/down, Increase/Decrease
10-6 Sales Forecasts
 Many companies try to estimate their future
sales…predictions or projections.
 One way companies forecast sales is by
analyzing sales trends/history from the past.
 Using trends or forecasts assumes that all the
factors that influence sales remain the same.
10-6 Sales Forecasts
 EX: Sales of morning treat cereal increased
an average of 20% a year over the past 6
years. This year’s sales of Morning treat
were $6,500,000. Based on this trend, what
are the forecasted sales for next year?
 20% * 6,500,000 = 1,300,000
 1,300,000 + 6,500,000 = 7,800,000
 Page 449 in textbook… A & B.
 A. $7,050,000
 B. 338,040
Forecasting Methods…
 Market tests – involves the actual sale of a
new product in a specific geographic city.
 Surveys – questions to consumers regarding
a companies products
 EX: The Useful Products Company developed
a clip-on carrying case that holds two pairs of
eyeglasses. In one test market, Useful
Products sold 7,200 cases at $3.80 a case.
Useful Products now wants to sell the cases
nationally in all 60 of its markets, all of which
are similar in size. Based on sales in the test
market, what total unit and dollar sales are
forecasted for the first year?
 60 * 7,200 = 432,000 unit sales forecast
 $3.80 * 432,000 = $1,641,600 dollar sales
forecast
 Page 450 in textbook… C & D
 C. $402,875; $16,517,875
 D. $3,394,800.
 Pages 139 homework
10-7 Market Share
 Market Share – tells what percentage of the
total market’s sales on seller has.
 Page 453…example 1

 A. 58%
 B. 26,460
 #5-13 on page 454 and Page 140 homework