Problem:
Preston Milled products currently sell a product with a variable cost per unit of $19.75 and a unit selling price of $37.75. At the present time, the firm only sells on a cash basis with monthly sales of 250 units. The monthly interest rate is 1.3 percent.
Required:
Question: What is the switch break-even point if the firm switched to a net 30 credit policy? Assume the selling price per unit and the variable costs per unit remain constant.
263 units
260 units
259 units
261 units
257 units
Note: Please provide full description.