140 accounts in advertising industry use 2,285 Courier Paks (CP) per month CP price is $12.50 and variable cost is stion $4.25 ew custome s) Retention rate 0.9, discount rate 12% ex 15UP What is the maximum FedEx should be willing to spend to acquire a new account in this industry?
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- Firm: FedEx • 140 accounts in the advertising industry use 2,285 Courier Packs (CP) per month • CP price is $12.50 and variable cost is $4.25 • Retention rate=0.9, discount rate=12% • What is the maximum FedEx should be willing to spend to acquire a new account in this industry?The cost of product X is 30 percent of its selling price, and the carrying cost is 8 percent of selling price. Accounts are paid on average 60 days after sale. Sales per month average P25,000. What is the investment in accounts receivable? choose the letter of the correct answera. P8,000.00b. P9,000.00c. P19,000.00d. P29,000.00e. P39,000.00The cost of product X is 30 percent of its selling price, and the carrying cost is 8 percent of selling price. Accounts are paid on average 60 days after sale. Sales per month average P35,000. What is the investment in accounts receivable? CHOOSE THE ANSWERA. P600.00B. P6,600.00C. P19,000.00D. P16,600.00E. P26,600.00
- Vision Company sells optical equipment. Blitz Company manufactures special glass lenses. Vision orders 11,400 lenses per year, 200 per week, at $35 per lens. Blitz covers all shipping costs. Vision earns 25% on its cash investments. The purchase-order lead time is 2.5 weeks. Vision sells 225 lenses per week. The following data are available: Relevant ordering costs per purchase order $41.25 Relevant insurance, materials handling, breakage, and so on, per year $ 4.50 What is the economic order quantity for Vision? a. 328 lenses b. 457 lenses c. 161 lenses d. 266 lensesReceivables: Credit Terms: ABC sold boxes of candles at P1,000 each. Each box costs P750. Daily sales total 500 boxes overits 250-work day year. All sales are on credit. For the coming year, it plans to accept customers who have less desirablecredit ratings. Sales are expected to increase by 10%. Average collection period will increase from 40 days to 50 days. Baddebts will increase from 1% to 3% of sales. Operating expenses will stay the same. For profitability analysis, ABC uses an 8%effective interest rate. Compute for the required by filling up the supporting table. Notes:1. The Increase/(Decrease) column may be computed either by row or later once the Current and Proposedcolumns are complete.2. Some parts of the computations were omitted in the supporting table. These include turnovers and averagebalance as well as conversion of daily amounts to annual amounts. Students are assumed to know how tocompute for these because they were taken up in the previous topics.3. Be careful when…Receivables: Credit Terms: ABC sold boxes of candles at P1,000 each. Each box costs P750. Daily sales total 500 boxes overits 250-work day year. All sales are on credit. For the coming year, it plans to accept customers who have less desirablecredit ratings. Sales are expected to increase by 10%. Average collection period will increase from 40 days to 50 days. Baddebts will increase from 1% to 3% of sales. Operating expenses will stay the same. For profitability analysis, ABC uses an 8%effective interest rate. Compute for the required by filling up the supporting table. Required: How much would the following be assuming that ABC proceeds with its plan to accept the new market group?1. Increase in gross profit2. Increase in receivables carrying cost3. Increase in bad debts4. Net advantage or disadvantage of the plan
- Receivables: Credit Terms: ABC sold boxes of candles at P1,000 each. Each box costs P750. Daily sales total 500 boxes overits 250-work day year. All sales are on credit. For the coming year, it plans to accept customers who have less desirablecredit ratings. Sales are expected to increase by 10%. Average collection period will increase from 40 days to 50 days. Baddebts will increase from 1% to 3% of sales. Operating expenses will stay the same. For profitability analysis, ABC uses an 8%effective interest rate. Compute for the required by filling up the supporting table.Required: How much would the following be assuming that ABC proceeds with its plan to accept the new market group?What is the neet advantage or disadvantage of the plan?Applied: Revising Sales IncentivesData concerning Wislocki Corporation's single product appear below:Per Unit Percent of SalesSelling price $ 180 100 %Variable expenses 45 25 %Contribution margin $ 135 75 %Fixed expenses are $1,048,000 per month. The company is currently selling 9400 units per month. Themarketing manager would like to introduce sales commissions as an incentive for the sales staff. Themarketing manager has proposed a commission of $12 per unit. In exchange, the sales staff would accept anoverall decrease in their salaries of $106,000 per month. The marketing manager predicts that introducingthis sales incentive would increase monthly sales by 440 units.Required:What should be the overall effect on the company's monthly net operating income of this change?A bookstore sells a particular book for ₱450. Variable expenses are ₱280 per book. Currently, the bookstore is just breaking even at 6,000 books per year. The annual fixed expenses would be? a. ₱ 1,020,000 b. ₱ 450,000 c. ₱ 280,000 d. ₱ 730,000 e. ₱ 714,705.88 f. ₱ 1,680,000
- A supplier sells MF Tires to dealers. The annual demand is approximately1,000 tires. The supplier pays P50 for each tire and estimates that the annualholding cost is 20 percent of the total value of tires. It costs approximatelyP25 to place an order. The supplier currently orders 80 tires per month.Required:a. Calculate ordering, holding, and total inventory costs for thecurrent ordered quantity.b. Determine the EOQ.c. How many orders will be placed per year using the EOQ?d. Calculate ordering, holding, and total inventory costs for the EOQand also determine the change in total inventory cost.PT. AAH is currently is selling cooking oil for IDR 15.000/litre. Sales (all on credit) last year were recorded at 2.400.000 unit. Variable cost per unit is IDR 9.000/litre. The firm total fixed cost is IDR. 12.000.000.000. The firm is considering changing its credit policy. Assumption: 1 year = 360 days. PT. AAH initiate cash discount program, changing its credit terms from net 30 to 4/10 net 30. This change is expected to reduce the average collectionperiod from 40 days to 25 days. The sales unit is expected to increase 5% from the current level. PT. AAH estimates 85% of its customer will take the discount. The level of bad debt percentage will be decreasing from 2% to 0.5%. The cost of investment in Account Receivable is 17%. Should PT. AAH change its current account receivable policy?Explain your answerBulldogs Inc. sells on term 3/20, net 40. Total sale for the year are P1,200,000 on which 40% is cash sales. 30% pays on the 20th day and take discounts while the remaining customers always pay on time. What is the average amount of accounts receivable? (Use 360-day year) The annual demand of Bulldogs Inc. sole product totaled 450,000 units. Due to uncertainty in supply of items, the maximum possible lead time for the orders is 2 weeks and 1 day. A safety stock of 6,250 units is determined. What is the normal lead time? (Use 360 days)
