Company XYZ manufactures and sells a single product and provides the following information per unit: Sale Price:
Question:
Company XYZ manufactures and sells a single product and provides the following information per unit:
Sale Price: $60
Variable production cost: $13
Fixed Production Cost: $19
Variable selling cost: $7
The company recently launched a new version of its product, but it has 2,000 units of the old version in stock that a foreign distributor wants to purchase for sale in another country. Variable selling cost is a sales commission that will not have to be paid if the distributor purchases legacy units. The company is unaware of other interested buyers for legacy units. If the foreign distributor pays $10 per unit, what would be XYZ's total profit or loss on this order? (Make sure to calculate the total, not the amount per unit; Round to the nearest dollar; Use a positive number to indicate profit and a negative number to indicate loss.)
Managerial Accounting
ISBN: 978-0077522940
15th edition
Authors: Ray Garrison, Eric Noreen, Peter Brewer