Price Corp. is considering selling to a group of new customers and creating new annual sales of $180,000. 4% will be uncollectible. The collection cost on these accounts is 2% of new sales, the cost of producing and selling is 76% of sales and the firm is in the 29% tax bracket. What is the profit on new sales?
Sales | $ 180,000 | |
Less: | ||
Cost of producing and selling3 | $ 136,800 | =180000*76% |
Bad debts | $ 7,200 | =180000*4% |
Collection cost | $ 3,600 | =180000*2% |
Profit before tax | $ 32,400 | |
Less: Tax | $ 9,396 | =32400*29% |
Profit on sales | $ 23,004 |
Price Corp. is considering selling to a group of new customers and creating new annual sales...
Price Corp. is considering selling to a group of new customers and creating new annual sales of $120,000.3% will be uncollectible. The collection cost on all accounts is 3% of new sales, the cost of producing and selling is 76% of sales, and the firm is in the 18% tax bracket. What is the profit on new sales? Multiple Choice Ο Ο Ο Ο
) Price Corp. is considering selling to a group of new customers and creating new annual sales of $500,000. 3% will be uncollectible. The collection cost on these accounts is 6% of new sales, the cost of producing and selling is 76% of sales and the firm is in the 20% tax bracket. What is the profit on new sales? 60000 61128 62178 61287
Problem 7-17 Credit policy decision [LO7-4] Johnson Electronics is considering extending trade credit to some customers previously considered poor risks. Sales would increase by $110,000 if credit were extended to these new customers. Of the new accounts receivable generated, 5 percent will prove to be uncollectible. Additional collection costs will be 2 percent of sales, and production and selling costs will be 70 percent of sales. The firm is in the 10 percent tax bracket. a. Compute the incremental income...
Johnson Electronics is considering extending trade credit to some customers previously considered poor risks. Sales would increase by $146,000 if credit is extended to these new customers. Of the new accounts receivable generated, 8 percent will prove to be uncollectible. Additional collection costs will be 6 percent of sales, and production and selling costs will be 72 percent of sales. The firm is in the 10 percent tax bracket. a. Compute the incremental income after taxes. Incremental income after taxes...
Johnson Electronics is considering extending trade credit to some customers previously considered poor risks. Sales would increase by $150,000 if credit is extended to these new customers. Of the new accounts receivable generated, 5 percent will prove to be uncollectible. Additional collection costs will be 2 percent of sales, and production and selling costs will be 74 percent of sales. The firm is in the 35 percent tax bracket. a. Compute the incremental income after taxes. Incremental income after taxes...
Johnson Electronics is considering extending trade credit to some customers previously considered poor risks. Sales would increase by $150,000 if credit is extended to these new customers. Of the new accounts receivable generated, 5 percent will prove to be uncollectible. Additional collection costs will be 2 percent of sales, and production and selling costs will be 74 percent of sales. The firm is in the 35 percent tax bracket. a. Compute the incremental income after taxes. Incremental income...
Johnson Electronics is considering extending trade credit to some customers previously considered poor risks. Sales would increase by $250,000 if credit is extended to these new customers. Of the new accounts receivable generated, 7 percent will prove to be uncollectible. Additional collection costs will be 6 percent of sales, and production and selling costs ill be 70 percent of sales. The firm is in the 30 percent tax bracket a. Compute the incremental income after taxes. Incremental income after taxes...
Johnson Electronics is considering extending trade credit to some customers previously considered poor risks. Sales would increase by $150,000 if credit were extended to these new customers. Of the new accounts receivable generated, 5 percent will prove to be uncollectible. Additional collection costs will be 2 percent of sales, and production and selling costs will be 74 percent of sales. The firm is in the 35 percent tax bracket. a. Compute the incremental income after taxes. Incremental income after taxes...
Fast Turnstiles Co. is evaluating the extension of credit to a new group of customers. Although these customers will provide $234,000 in additional credit sales, 15 percent are likely to be uncollectible. The company will also incur $16,500 in additional collection expense. Production and marketing costs represent 70 percent of sales. The firm is in a 30 percent tax bracket and has a receivables turnover of four times. No other asset buildup will be required to service the new customers....
Fast Turnstiles Co. is evaluating the extension of credit to a new group of customers. Although these customers will provide $108,000 in additional credit sales, 8 percent are likely to be uncollectible. The company will also incur $15,800 in additional collection expense. Production and marketing costs represent 71 percent of sales. The firm is in a 30 percent tax bracket and has a receivables turnover of four times. No other asset buildup will be required to service the new customers....