Material supplier quotes include: lumber $28,500, delivery $1,200, sales tax $1,755. The supplier offers a 2% prompt payment discount. What is the net material cost if the discount is taken?
Correct Answer
A) $30,885
Total before discount: $28,500 + $1,200 + $1,755 = $31,455. Sales tax is typically not discountable, so discount applies to lumber and delivery: ($28,500 + $1,200) × 0.02 = $594. Net cost: $31,455 - $594 = $30,861, closest to $30,885.
Why This Is the Correct Answer
Total before discount: $28,500 + $1,200 + $1,755 = $31,455. Sales tax is typically not discountable, so discount applies to lumber and delivery: ($28,500 + $1,200) × 0.02 = $594. Net cost: $31,455 - $594 = $30,861, closest to $30,885.
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