What will be the change in the firm total monthly profits

Assignment Help Managerial Accounting
Reference no: EM133028870

Question - Microbiotics currently sells all of its frozen dinners cash-on-delivery but believes it can increase sales by offering supermarkets 1 month of free credit. The price per carton is $90, and the cost per carton is $60. The unit sales will increase from 1,040 cartons to 1,100 per month if credit is granted. Assume all customers pay their bills and take full advantage of any credit period offered.

a. If the interest rate is 1% per month, what will be the change in the firm's total monthly profits on a present value basis if credit is offered to all customers?

b. If the interest rate is 1.5% per month, what will be the change in the firm's total monthly profits on a present value basis if credit is offered to all customers?

Reference no: EM133028870

Questions Cloud

How does conflict mediation help in a company : How does conflict mediation help in a company?
Impact of key stakeholder and interest group : Regarding adults that refuse to get vaccinated.Vaccine hesitancy refers to the refusal by an individual or group to seek available communicable disease vaccines
How much goes to each class of stock : No dividends are in arrears from previous years. If the board declares $50,000 in dividends this year, how much goes to each class of stock
What interest expense should the firm report for the bonds : A firm plans an issue of bonds with a maturity value of $1,000, what interest expense should the firm report for the bonds for the first year
What will be the change in the firm total monthly profits : If the interest rate is 1% per month, what will be the change in the firm's total monthly profits on a present value basis if credit is offered to all customers
Delivering value in healthcare : At some point you or a loved one will need healthcare, what delivering value in healthcare means to you as both a professional and consumer.
Sarbanes-oxley act fixes the financial issues : Sarbanes-Oxley Act fixes the financial issues - elements of the Sarbanes-Oxley Act that attempted to address these issues
How to foster mastery orientation in children : Based on the results of this study, what advice would you give parents on how to foster mastery orientation in their children?
How will this transaction appear : Employees of Richardson Co. worked the week ending December 31, but will not be paid until January. How will this transaction appear

Reviews

Write a Review

Managerial Accounting Questions & Answers

  Manage budgets and financial plans

Explain the budgeting process and its importance to a business, identifying the components of different budgets, forecast estimates for inclusion in the budgets.

  Prepare a retained earnings statement

Prepare a retained earnings statement for the year and Prepare a stockholders' equity section of given case.

  Prepare a master budget for the three-month period

Prepare a master budget for the three-month period.

  Construct the companys direct labor budget

Construct the company's direct labor budget for the upcoming fiscal year, assuming that the direct labor workforce is adjusted each quarter to match the number of hours required to produce the forecasted number of units produced.

  Evaluate the predetermined overhead rate

Evaluate the Predetermined Overhead Rate

  Determine the company''s bid

Determine the company's bid if activity-based costing is used and the bid is based upon full manufacturing cost plus 30 percent.

  Compute the pool rates for the different activities

Complete the schedule to compute the pool rates for the different activities.

  Prepare Company financial statements

Prepare Company financial statements

  Prepare an analysis of terracycles

This individual assignment is based on the TerraCycle Inc.

  Discuss the ethical issues

Discuss the ethical issues

  Political resources in emerging markets

Calculate the GDP in Income Approach  and Expenditure Approach

  Management accounting - ehsan electronics company

A new plant accountant suggested that the company may be able to assign support costs to products more accurately by using an activity based costing system that relies on a separate rate for each manufacturing activity that causes support costs.

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd