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Extension of Credit to InfoSearch

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Essay

Extension of Credit to InfoSearch
You have received a request for credit from a company called InfoSearch for online databases available from your company.You are a vendor for information databases,and subscribers to your services may contract for 12-month access to this information.You offer various service packages that provide access to specific databases.InfoSearch wants the Standard Package which allows access to a selection of your company's available databases.The extension of credit will allow InfoSearch to order additional levels of service as needed and pay for them on a monthly basis.
Required:
Send a letter,stating that credit is granted,to Olena Androgenski at InfoSearch.


Definitions:

Direct Costs

Costs that can be directly attributed to the production of a specific good or service, such as raw materials and direct labor.

Allocation Base

A measure or statistic used to distribute indirect costs to different cost objects, such as departments or products.

Overhead Costs

Expenses related to the day-to-day running of a business that cannot be directly attributed to creating a product or service, such as rent, utilities, and insurance.

Averaging Process

A method used in manufacturing or cost calculation where inputs or expenses over a period are averaged to determine a standard cost or value.

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