RiFresQuestion based on modified problems 3.3 from the reference text [Flynn (2009)] from page 78 of the textbookPolymerco, a North American manufacturer of specialty polymers, has the following highly condense income statement, given in the tablebelow. There current sales are to North American customers only. The president casually mentions that it would be nice to have moreoffshore sales to diversity the company.Polymerco Income StatementGross salesBad debtNet salesCOGSContribution marginCM (%)SG&AThis year ($000)26507nilOperating incomeOther income and interest on long-termdebt*%2650722,243426416.1%2,1222142-60Last year ($000)24177nil2417721,341283611.7%2,067769-50Net income2082719(a) if Polymerco's production is running at 84% capacity, what is the maximum discount in percentage that you can provide?Maximum discount 11.0x %In this case, will you have a negative impact on the profitability of the business?No ✔(b) if Polymerco's production is running at 100% capacity, how much percentage of discount can you provide without reducing theprofitability?30.1the

1- BREAK EVEN POINT (IN SALES) = FIXED COST / PV RATIO.2- MARGINAL OF SAFETY (MOS) = TOTAL SALES -…

FGMPs Question based on modified problems 3.3 from the reference text [Flynn (2009)] from page 78 of the textbook Polymerco, a North American manufacturer of specialty polymers, has the following highly condense income statement, given in the table below. There current sales are to North American customers only. The president casually mentions that it would be nice to have more offshore sales to diversity the company. Polymerco Income Statement Gross sales Bad debt Net sales COGS Contribution margin CM (%) SG&A This year ($000) 26507 nil 26507 22,243 4264 16.1% 2,122 2142 -60 Operating income Other income and interest on long-termi debt Last year ($000) 24177 nil 24177 21,341 2836 11.7% 2,067 769 -50 *% D Net income 2082 719 (a) if Polymerco's production is running at 84% capacity, what is the maximum discount in percentage that you can provide? x % Maximum discount 11.0 In this case, will you have a negative impact on the profitability of the business? No (b) if Polymerco's production is running at 100% capacity, how much percentage of discount can you provide without reducing the profitability? 30,1 the

FGMPs Question based on modified problems 3.3 from the reference text [Flynn (2009)] from page 78 of the textbook Polymerco, a North American manufacturer of specialty polymers, has the following highly condense income statement, given in the table below. There current sales are to North American customers only. The president casually mentions that it would be nice to have more offshore sales to diversity the company. Polymerco Income Statement Gross sales Bad debt Net sales COGS Contribution margin CM (%) SG&A This year ($000) 26507 nil 26507 22,243 4264 16.1% 2,122 2142 -60 Operating income Other income and interest on long-termi debt Last year ($000) 24177 nil 24177 21,341 2836 11.7% 2,067 769 -50 *% D Net income 2082 719 (a) if Polymerco's production is running at 84% capacity, what is the maximum discount in percentage that you can provide? x % Maximum discount 11.0 In this case, will you have a negative impact on the profitability of the business? No (b) if Polymerco's production is running at 100% capacity, how much percentage of discount can you provide without reducing the profitability? 30,1 the

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Subject:accounting
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A higher gross margin implies ______________ . The company has huge market share The company has the flexibility to change its pricing policy The company sells goods at huge discounts The cost of goods sold remains same over the years