Carver company produces a product which sells for $40. variable manufacturing costs are $18 per unit. fixed manufacturing costs are $5 per unit based on the current level of activity, and fixed selling and administrative costs are $4 per unit. a selling commission of 15% of the selling price is paid on each unit sold. the contribution margin per unit is :
a) $7
b) $17
c) $22
d) $16

Garcia industries has sales of $200,000 and accounts receivable of $18,500, and it gives its customers 25 days to pay. the industry average dso is 27 days, based on a 365-day year. if the company changes its credit and collection policy sufficiently to cause its dso to fall to the industry average, and if it earns 8.0% on any cash freed-up by this change, how would that affect its net income, assuming other things are held constant? a. $241.45b. $254.16c. $267.54d. $281.62e. $296.44