Which of the following is an advantage of using the net price method for recording cash discounts on credit sales?
A) It eases communication with customers about their balances.
B) It conservatively reflects current period sales revenue.
C) It simplifies recording of sales returns and allowances.
D) It requires less record keeping than the gross method.
B
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At this price, all production capacity gets booked about one week in advance. A group of customers have said that they would be willing to pay $15 per unit if capacity was available on the last day. About ten days in advance, demand for the high-price segment is normally distributed with a mean of 250 and a standard deviation of 100. How much production capacity should the manufacturer reserve for the last day? What will be an ideal response?