A Company Has the Following Accounts Receivable Payment History: Which

question 28

Multiple Choice

A company has the following accounts receivable payment history: Which of the following actions might increase the cash receipts over the coming year?
$\begin{array}{ll}\text { Paid in the month of sale } & 10 \% \\\text { Paid in the month following sale } & 30 \% \\\text { Paid in the second month following sale } & 40 \% \\\text { Paid in the third month following sale } & 10 \%\end{array}$

• A)allowing customers longer to pay their accounts receivable balances
• B)turning uncollectible accounts over to a collection agency with a proven history of success
• C)giving a cash discount to customers who pay in the month of sale
• D)decreasing the price of the products sold by the company

---

Definitions:

Variable Production

Production costs that vary in total directly and proportionately with changes in the production level.

Fixed Production

Production levels set without regard to the varying levels of demand or activity, often resulting in constant output rates.

Machine-Hours

The total duration that machinery is utilized for production activities, expressed in hours, serving as a basis for allocating machine-related costs to products.

Manufacturing Overhead

All indirect costs associated with manufacturing, such as maintenance and repairs on equipment, utilities, and salaries for employees not directly involved in production.