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Question 2 (20 marks) Beruang Berhad is currently selling its products for RM50 per unit. All sales are on credit. In 2018, 20,000 units were
Question 2 (20 marks) Beruang Berhad is currently selling its products for RM50 per unit. All sales are on credit. In 2018, 20,000 units were sold. Variable cost per unit is RM20 Beruang Berhad is deciding whether to relax its credit standards, which will increase unit sales by 5% , increase average collection period (ACP) from 25 days to 30 days, and increase bad debts from 3% to 6 % of credit sales. Beruang Berhad's opportunity cost of tying up funds in its accounts receivable is 6%. Required: (5 marks) a. Calculate the additional profit from the increase in sales b Calculate the cost of additional bad debt and investment in accounts (5 marks) receivable (5 marks) . Calculate the overall benefits/cost (5 marks) d. Should Beruang Berhad relax its credit standards? Why
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