CASH COOLECTION PATTERN is as follows: 21% of a month's sales are collected by month-end. An additional 48% is collected in the month following, and the remaining 31% is collected in the second month following sale. Thus far bad debts have been negligible. Since OWP's policy is to never stock out of its pen-based input devices (PIDS), and potentially forfeit market share to competitors, the Company maintains fairly high inventory levels. Therefore, desired ending inventories are equal to 76% of the next month's sales in units. Prior to June, OWP sold only the basic model PID-B at a price of $230 per unit. The PID-B costs Out- West Products $155 each from the manufacturer and it pays for purchases as follows: