RAMA Textile has a present sales of level of 30,000 Units. It has prepared the following...

 

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RAMA Textile has a present sales of level of 30,000 Units. It has prepared the following projections for a year : Selling Price per unit Variable Cost per unit Total Cost per unit Credit period allowed 50 ₹25 *40 1 month The company proposes to increase the credit period allowed to its customers from 1 month to 2 months. It is envisaged that the change in the policy as above will increase the sales by 10%. The company desires a return of 20% on its investment. You are required to examine the proposed Credit Policy. RAMA Textile has a present sales of level of 30,000 Units. It has prepared the following projections for a year : Selling Price per unit Variable Cost per unit Total Cost per unit Credit period allowed 50 ₹25 *40 1 month The company proposes to increase the credit period allowed to its customers from 1 month to 2 months. It is envisaged that the change in the policy as above will increase the sales by 10%. The company desires a return of 20% on its investment. You are required to examine the proposed Credit Policy.

Answer rating: 100% (QA)

Answer Solution selling price per unit variable cost per unit contribution margin per ... View the full answer