Question based on modified problems 3 3 from the reference text Flynn (2009) from page 78 of the textbook Polymerco, a North American manufacturer of specialty polymers, has the following highly condense income statement, given in the table below There current sales are to North American customers only The president casually mentions that it would be nice to have more offshore sales to diversity the company Polymerco Income Statement This year ($000) Last year ($000) Gross sales 26518 24818 Bad debt nil nil Net sales 26518 24818 COGS 22,243 21,341 Contribution margin 4275 3477 CM( ) 16 1 14 SG A 2,122 2,067 Operating income 2153 1410 Other income and interest on long term debt 60 50 Net income 2093 1360 (a) if Polymerco's production is running at 84 capacity, what is the maximum discount in percentage that you can provide (b) if Polymerco's production is running at 100 capacity, how much percentage of discount can you provide without reducing the profitability

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Question: Question based on modified problems 3.3 from the reference text [Flynn (2009)] from page 78 of the textbook: Polymerco, a North American manufacturer of specialty

Question based on modified problems 3.3 from the reference text [Flynn (2009)] from page 78 of the textbook:

Polymerco, a North American manufacturer of specialty polymers, has the following highly condense income statement, given in the table below. There current sales are to North American customers only. The president casually mentions that it would be nice to have more offshore sales to diversity the company.

Polymerco Income Statement
	This year ($000)	Last year ($000)
Gross sales	26518	24818
Bad debt	nil	nil
Net sales	26518	24818
COGS	22,243	21,341
Contribution margin	4275	3477
CM(%)	16.1%	14%
SG&A	2,122	2,067
Operating income	2153	1410
Other income and interest on long-term debt	-60	-50
Net income	2093	1360

(a) if Polymerco's production is running at 84% capacity, what is the maximum discount in percentage that you can provide?

(b) if Polymerco's production is running at 100% capacity, how much percentage of discount can you provide without reducing the profitability?

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