Use the following information when solving this problem for changes in credit terms and collection policies. Should these changes be accepted/rejected? 1. Accounts Receivable Problem is Dollars: Easier Credit Terms Present Situation Variable Credit Sales $10,500,000 Total Fixed Cost (TFC) $2,400,000 Total Variable Cost (TVC) $5,250,000 Total Cost (TC) $7,650,000 Credit Termsad selles to b2% credit sales Notes payable interest rate 9% Participation Rate zu 85% mantinussons of 191 Shottrado boys boy 2% Collection/Approval Costs Days' of Sales Outstanding Bad Debt Expense 40 days 2.5% Silhour in batek Expected Proposed Results $10,700,000 3% of credit sales 93% 1.8% 39 days 2.0% Year 365 days Days' of Sales Outstanding is the same as Daily Sales Outstanding Steps: There are 6 steps Step 1: Additional Profit/Loss caused by the change in Credit Sales: Step 2: Additional Savings/Costs associated with Accounts Receivable: Step 3: Additional Savings/Costs associated with Bad Debts: Step 4: Additional Savings/Costs associated with Credit Terms: Use the following information when solving this problem for changes in credit terms and collection policies. Should these changes be accepted/rejected? 1. Accounts Receivable Problem is Dollars: Easier Credit Terms Present Situation Variable Credit Sales $10,500,000 Total Fixed Cost (TFC) $2,400,000 Total Variable Cost (TVC) $5,250,000 Total Cost (TC) $7,650,000 Credit Termsad selles to b2% credit sales Notes payable interest rate 9% Participation Rate zu 85% mantinussons of 191 Shottrado boys boy 2% Collection/Approval Costs Days' of Sales Outstanding Bad Debt Expense 40 days 2.5% Silhour in batek Expected Proposed Results $10,700,000 3% of credit sales 93% 1.8% 39 days 2.0% Year 365 days Days' of Sales Outstanding is the same as Daily Sales Outstanding Steps: There are 6 steps Step 1: Additional Profit/Loss caused by the change in Credit Sales: Step 2: Additional Savings/Costs associated with Accounts Receivable: Step 3: Additional Savings/Costs associated with Bad Debts: Step 4: Additional Savings/Costs associated with Credit Terms