Miranda Tool Company sells to retail hardware stores on credit terms of "net 30." Annual credit sales are $18 million and are spread evenly throughout the year. The company's variable cost ratio is 0.70, and its accounts receivable average$1.9 million. Using this information, determine the following for the company:
a. Average daily credit sales
b. Average collection period
c. Average investment in receivables
Assume there are 365 days per year.© BrainMass Inc. brainmass.com June 3, 2020, 6:25 pm ad1c9bdddf
a. Average daily credit sales = Annual sales/360=(18000000/365)= $49315
b. Average ...
The solution discusses various tools to manage the receivables.