Harlan's Customers Have Been a Little Slow in Paying Their

question 20

Multiple Choice

Harlan's customers have been a little slow in paying their invoices, and he is short on cash to pay his quarterly taxes. Harlan should consider

• A) sending the late payers to a collection agency.
• B) factoring.
• C) putting his late payers on credit hold until they pay up.
• D) taking out a personal loan to pay the taxes.

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Definitions:

Variable Cost

Costs that vary directly with the level of production or output, such as materials and labor.

Fixed Cost

Costs that do not vary with the volume of production or sales, such as rent, salaries, and insurance.

Average Cost

The total cost divided by the quantity produced, calculating the cost on a per unit basis.

Total Output

The total quantity of goods or services produced by a firm or economy.