# Total Cost Curve & Organizing the Credit Function

Instructions:

question 1 of 3

### Companies that lend credit to their customers spend money to manage collections, carry bad debt because some customers do not pay what they owe, and incur costs from not having available cash on hand. What is another name for these expenses?

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### 2. Gerald owns a specialty printing company. He is losing sales to a competitor because he does not offer any credit and has decided that he will open credit lines to his customers. What is the mathematical method he should employ to compare and analyze his carrying and opportunity costs?

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In order to assess your comprehension of the total cost curve and organizing the credit function, explore the worksheet and quiz. For the quiz, you need to know about the different types of costs.

## Quiz & Worksheet Goals

You will be assessed on your knowledge of:

• Examples of a carrying cost
• The point when the total credit curve is the optimal amount of credit a company can offer to customers
• Credit elements that must be organized
• Term for what it costs to offer credit to customers
• Another type of cost

## Skills Practiced

• Information recall - access the knowledge you have gained about examples of carrying costs
• Interpreting information - verify that you can read information about the credit elements that must be organized and interpret them correctly