QUESTION 3 Belton Manufacturing is currently selling a product for RM20 per unit. All sales are on credit. Last year 120,000 units were sold. Variable cost per unit is RM12. The total fixed costs are RM240,000. Belton is deciding whether to relax its credit standards, which will increase unit sales by 5%; increase average collection period from 30 days to 45 days; and increase bad debts from 1% to 2% of sales. The company's opportunity cost of tying up funds in AR is 15%. Should Belton Manufacturing relax its credit standards? 75