To determine the discount allowed by Department A, we need to analyze the information provided in the table and apply the appropriate calculations.
Given Data:
- Sales for Dept A: ₦250,000
- Purchases for Dept A: ₦500,000
- Discount allowed by Dept A: ₦15,000 (this is the total discount allowed, but we need to find the portion applicable to Dept A)
Understanding Discounts:
Discounts can be classified into two types:
1.
Discount Received: This is a reduction in the price of purchases. Dept A received a discount of ₦24,000.
2.
Discount Allowed: This is a reduction given to customers on sales. Dept A allowed a discount of ₦15,000.
Calculation of Discount Allowed:
To find the discount allowed by Department A, we can use the following formula:
[
\text{Discount Allowed} = \text{Total Sales} \times \left( \frac{\text{Discount Allowed}}{\text{Total Sales of Both Departments}} \right)
]
However, since we are only interested in the discount allowed by Department A, we can directly use the total discount allowed (₦15,000) and apply it proportionally based on the sales of each department.
Proportional Calculation:
- Total Sales of Both Departments:
- Dept A: ₦250,000
- Dept B: ₦150,000
-
Total Sales = ₦250,000 + ₦150,000 = ₦400,000
-
Proportion of Sales for Dept A:
[
\text{Proportion for Dept A} = \frac{\text{Sales of Dept A}}{\text{Total Sales}} = \frac{₦250,000}{₦400,000} = 0.625
]
-
Calculate Discount Allowed for Dept A:
[
\text{Discount Allowed for Dept A} = \text{Total Discount Allowed} \times \text{Proportion for Dept A}
]
[
= ₦15,000 \times 0.625 = ₦9,375
]
Conclusion:
Thus, the discount allowed by Department A is
₦9,375.
Explanation of Other Options:
- Option A: ₦5,000: This amount is too low and does not reflect the proportionate share of the total discount based on sales.
- Option C: ₦5,625: This is also incorrect as it does not align with the calculated proportion of sales.
- Option D: ₦8,000: This is not the correct calculation based on the sales figures provided.
Revision Summary:
- The discount allowed by Dept A is calculated based on its sales proportion relative to total sales.
- The formula used is: (\text{Discount Allowed} = \text{Total Discount Allowed} \times \left( \frac{\text{Sales of Dept A}}{\text{Total Sales}} \right)).
- The correct answer is ₦9,375, which reflects the appropriate share of the total discount allowed.
- Always ensure to check the proportions when dealing with multiple departments or segments in financial calculations.