1. A company with ₱48 million in credit sales per year plans to relax its credit standards, projecting that this will increase credit sales by ₱720,000. The company's average collection period for new customers is expected to be 75 days, and the payment behavior of the existing customers is not expected to change. Variable costs are 80% of sales. The firm's opportunity cost is 20% before taxes. Assuming a 360-day year, what is the company's benefit (loss) on the planned change in credit terms?

2. ABC produces 120,000 high-tech bikes a year and orders the brake assembly from XYZ for ₱15.40 each The order cost is ₱84 and cycles estimates its inventory carrying costs to be 15%. What is their total ordering cost per year? *

Answer rating: 100% (QA)

Question 1 Companys Benefit Loss on Planned Change in Credit Terms To calculate the companys benefit or loss on the planned change in credit terms we ... View the full answer