Apollo Inc does not currently extend credit to their customers. They manufacture drum sets and sell them to specialty retailers in Canada. Last year the company sold 900 drum sets at a price of $400.00 per drum set. The company is considering offering new credit terms of net 40 days to all customers to drive sales. They believe the competitive advantage this new policy would provide would allow Apollo Inc to increase the selling price of their product by $12.00 per unit and increase sales by 120 units per year. Variable costs are expected to remain at $300 per unit and bad debt expense will be $6,000 per year. Note the wording here. Total Contribution Margin will go up for two reasons. First, there will be a price increase on the existing 900 drum sets being sold. Second, there will be an additional 120 drum sets sold at the new price Perform your analysis on total sales and total contribution margin, not just the change in sales volume.) Apollo Inc expects all customers will take advantage of the new terme, they will all pay Apollo Inc 40 days after a sales recorded). So, for the first time in the company's history they will have an accounts receivable balance in current assets and a bad debt expense The increase in sales women an increase in the inventory they had torvi Currently sitting at 5494,000 and is expected to increase by 150 percent Them w tranthe additional in working cantat by using line of credit hankan which chargest percent interest per year 9 A Calculate the increase in current assets and the costs to finance that increase lenter ambers as whole number New Old Difference 10 11 12 13 14 15 16 17 18 15 70 Description enter all numbers as positive Accounts receivable Inventory Current sets Bank interest costs 8. Calculate the impact of changing the credit policy on contribution margin 23 New Old Diferente Description Lente aumento Sales Variable G the moto change there Destronen Impact 28 29 C. Calculate the net impact of changing the credit policy: Impact 30 31 32 33 34 35 36 37 36 39 AD Description increase in contribution margin (enter as a positive number increase in bad debts and a negotiumbel Bank interest cost (entregonte number Net change Negative romut then Would you offer the credit ters/Na 2 dnu Que Deco Q4 noyat Q5 Alterativo Funding