he company makes all purchases on credit, and its suppliers uniformly offer a 3%

Question

he company makes all purchases on credit, and its suppliers uniformly offer a 3% sales discount. Does it the company's cash management system is accomplishing the goal of taking all available discounts? appear that just provide the numbers Hint compared actual discount vs maximum discount Maximum discount- calculation Maximum Discount Actual discount Difference Net cost of Purchases 3. In prior years, the company experienced a 4% returns and allowance rate on its sales, which means approximately 4% of its gross sales were eventually returned outright or caused the company to grant allowances to customers.How do this year's results compare to prior years' results? Hint compared actual returns vs maximum returns Actual return calculation Act Return % Previous Years % Change 1 : % returns

Explanation / Answer

From the above we can say that the performance of the company , with respect to sales returns and allowances has deteriorated , as shown by the increase in the return percentage from 4% to 5.32%, an increase of 1.32% of the total sales value. Increase in sales returns may indicate poor quality of the product.

Actual Returns Calculation Comparison Sales 225600 Actual Return 5.32% Sales Returns and allowances 12000 Previous Returns 4.00% % returns   5.32% Change 1.32%

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