Question: To complete this assessment, you must answer two cases.
Question 1: Managing Purchases for a Small PNG Business
Background
You are working as an assistant finance officer for Kundu Fresh Mart, a small retail business located in Port Moresby, Papua New Guinea. The business purchases food items and household products from local suppliers and sells them to customers.
The owner wants to improve purchasing decisions because incorrect invoices, missed discounts, and late payments are affecting the business's profit.
On 1A July 2026, Kundu Fresh Mart received the following invoice from Pacific Wholesale Traders Ltd.
Invoice Details
Pacific Wholesale Traders Ltd
P.O. Box 2450
Port Moresby, Papua New Guinea
Invoice No: PWT-1568
Date: 1A July 2026
IT0102- Business Mathematics 6 Assessment 2 6 S2 2026 6 Case Analysis 1
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Buyer: Kundu Fresh Mart
Item Description
Quantity
Unit Price (K)
Amount (K)
Rice (10 kg bags)
50
55.00
?
Cooking Oil (5 litre bottles)
40
4A.00
?
Canned Fish Boxes
30
95.00
?
Biscuits Cartons
2A
65.00
?
Tasks
1. Construct a complete invoice by calculating (3 Marks)
2. Give Trade Discount 1A% and Cash Discount 3/1A; you can use any Cash discount method and GST 12%
3. The supplier informs Kundu Fresh Mart that they can make payment either:
Option 1: Pay within 1A days and receive a 3% cash discount.
Option 2: Pay after 15 days and pay the full invoice amount within 30 days.
A. Calculate the amount saved if the business chooses Option 1.
B. The owner says: 3We should always delay payment because keeping money in the bank is better. 4 Analyse this statement. Do you agree or disagree? Provide reasons considering:
4. After reviewing the invoice, you discover the following problems:
3 The supplier charged K60 per rice bag instead of the agreed price of K55.
3 The invoice date is 1A July 2026, but the supplier entered the payment due date as August 2026.Prepare a report to the owner of Kundu Fresh Mart addressing:
1. Service Error
2. Purchasing Recommendation
3. Future Improvement Strategies
Question 2: Pricing and Sales Analysis at Raymond Boutique
Jane Raymond owns a women's clothing boutique. She sells two main categories of products: casual wear and formal wear. To improve her pricing strategy, Jane analyses the cost, markup, selling price, and monthly sales performance of her products.
For one month, Jane recorded the following information: The boutique sold 120 clothing items in total. Each casual wear item was purchased from suppliers at a cost of K (25 + A) per item. Each formal wear item was purchased from suppliers at a cost of K (35 + A) per item.
Jane applies a markup of 6A% on casual wear and 7A% on formal wear before selling them to customers. The total revenue generated from selling all items during the month was K6000 + 80*A.
Task to Complete:
1. Define suitable variables and determine the number of casual wear and formal wear items sold.
2. Calculate:
a) The selling price of each casual wear item.
b) The selling price of each formal wear item.
c) The total markup value earned from both product categories.
3. Determine the total sales revenue and verify whether it matches Jane 2 recorded monthly revenue.
4. Jane 2 business operating expenses are 1A% of total sales revenue. Calculate Net profit after operating expenses and Profit percentage based on total sales revenue.
5. Jane plans to increase the markup percentage of casual wear by 10 percentage points next month. Calculate the selling price. And the expected change in revenue if the same number of items are sold.
6. Based on your calculations, provide recommendations to Jane regarding pricing strategy and product promotion.
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c) The total markup value earned from both product categories.
3. Determine the total sales revenue and verify whether it matches Jane 2 recorded monthly revenue.
4. Jane 2 business operating expenses are 14% of total sales revenue. Calculate Net profit after operating expenses and Profit percentage based on total sales revenue.
5. Jane plans to increase the markup percentage of casual wear by 10 percentage points next month. Calculate the selling price. and the expected change in revenue if the same number of items are sold.
6. Based on your calculations, provide recommendations to Jane regarding pricing strategy and product promotion.
Marking Key:
Criteria High Distinction
(HD) Distinction (D) Credit (C) Pass (P) Fail(F) Unsatisfactory
Invoice
estimation
(30%) Correctly prepare
invoice with accurate
calculations
amounts, discounts,
GST and final
payment. Clear breakdown of
services provided;
adequate details are
provided. Minor
calculation errors but
correct method used. Basic breakdown of
service, most
calculations are correct with some
errors. Less breakdown of
services provided,
Basic calculations
attempted but
several errors. Incomplete Invoice Invoice
missing
Calculations
(50%) Accurate calculation and
demonstrating correct
application of the cash
discount method chosen. Mostly accurate
calculation. Some minor
errors in application of
the cash discount
method. Basic calculation with
significant errors in
Attempted but with
major errors Little attempt to
calculate No
calculations
Business
Analysis and
recommendati
ons
(20%) Provides a well-
justified recommendation using
calculations, cash flow
considerations,
profitability, and
supplier relationship
factors. Demonstrates
critical evaluation. Provides a clear
recommendation supported by calculations and relevant business reasoning. Provides a reasonable
recommendation with
some supporting
evidence. Recommendation is
provided, but
justification is weak
or mostly
descriptive. Recommendation
is unclear,
unsupported, or
unrelated to the
case. No
recommendation
provided.
position_hint: top-left: none; top-right: none; center: none; bottom-left: table, text; bottom-right: noneUser: Help solve these step by step
1. **Problem Statement:**
Calculate the complete invoice for Kundu Fresh Mart including amounts for each item, trade discount, cash discount, GST, and final payment. Then analyze payment options and errors found.
2. **Step 1: Calculate Amount for Each Item**
- Rice: Quantity = $50$, Unit Price = $55.00$
$$\text{Amount} = 50 \times 55 = 2750$$
- Cooking Oil: Quantity = $40$, Unit Price = $44.00$ (assuming $4A.00$ means $44.00$)
$$\text{Amount} = 40 \times 44 = 1760$$
- Canned Fish: Quantity = $30$, Unit Price = $95.00$
$$\text{Amount} = 30 \times 95 = 2850$$
- Biscuits: Quantity = $24$ (assuming $2A$ means $24$), Unit Price = $65.00$
$$\text{Amount} = 24 \times 65 = 1560$$
3. **Step 2: Calculate Subtotal**
$$\text{Subtotal} = 2750 + 1760 + 2850 + 1560 = 8920$$
4. **Step 3: Apply Trade Discount 14%**
$$\text{Trade Discount} = 0.14 \times 8920 = 1248.8$$
$$\text{Amount after Trade Discount} = 8920 - 1248.8 = 7671.2$$
5. **Step 4: Apply Cash Discount 3/14**
- Cash discount is 3% if paid within 14 days.
$$\text{Cash Discount} = 0.03 \times 7671.2 = 230.136$$
$$\text{Amount after Cash Discount} = 7671.2 - 230.136 = 7441.064$$
6. **Step 5: Add GST 12%**
$$\text{GST} = 0.12 \times 7441.064 = 892.92768$$
$$\text{Final Invoice Amount} = 7441.064 + 892.92768 = 8333.99168 \approx 8334.00$$
7. **Step 6: Payment Options Analysis**
- Option 1: Pay within 14 days and get 3% cash discount.
- Option 2: Pay after 15 days but within 30 days, pay full amount.
Amount saved by Option 1:
$$\text{Amount saved} = 230.136$$
8. **Step 7: Owner's Statement Analysis**
- Disagree with always delaying payment because:
- Losing cash discount reduces profit.
- Early payment improves supplier relationship.
- Keeping money in bank may earn less than discount lost.
9. **Step 8: Invoice Errors and Recommendations**
- Service Error: Supplier charged K60 instead of K55 for rice.
- Purchasing Recommendation: Verify prices before payment.
- Future Improvement: Implement invoice checking system and clear payment terms.
Final answer:
- Complete invoice amount after discounts and GST: $8334.00$
- Amount saved by early payment: $230.14$
- Advice: Pay early to save money and maintain good supplier relations.