Poutine Cheez Company Has Yearly Sales of $550,000 and an Average

question 76

Essay

Poutine Cheez Company has yearly sales of $550,000 and an average collection period of 35 days.A factoring company is offering a 35-day receivables loan equal to 85% of the accounts receivable at 9% along with a commission fee of .45% of the receivables.The firm estimates that by taking the offer, it could save $300 in collection costs and a full half of one percent in bad debt costs, as a percentage of sales.What is the annual cost (in percent)of the arrangement to Poutine Cheez?

Recognize the impact of sales mix on break-even analysis for companies selling multiple products.

Understand the concept of break-even point and its significance in cost-volume-profit (CVP) analysis.

Analyze and interpret the sales mix and its impact on company performance.

Calculate and understand the significance of operating leverage in predicting changes in operating income.

---

Definitions:

Portrayed Himself

Describes how an individual represented or depicted themselves to others, often through behavior or presentation.

Memory Joggers

Tools or techniques used to aid and improve one's ability to remember information.

S-O-L-E-R

An acronym for a communication model emphasizing five key behaviors: Squarely face the person, Open posture, Lean towards the sender, Eye contact maintained, Relax while listening.

Sound Waves

Vibrations that travel through air or another medium and can be heard when they reach a person's or animal's ear.