4 & 5

At the end of the year, a company offered to buy 4,540 units of a product from X Company for $11.00 each instead of the company's regular price of $17.00 each. The following income statement is for the 60,200 units of the product that X Company has already made and sold to its regular customers: Sales $1,023,400 Cost of goods 453,306 sold Gross margin $570,094 Selling and administrative 155,918 costs Profit $414,176 For the year, fixed cost of goods sold were $117,992, and fixed selling and administrative costs were $79,464. The special order product has some unique features that will require additional material costs of $0.87 per unit and the rental of special equipment for $3,000. 4. Profit on the special order would be B: F: A: C: $7,321 $8,273 $9,348 Submit Answer Tries 0/99 D: $10,563 E: $11,937 $13,488 5. The marketing manager thinks that if X Company accepts the special order, regular customers will be lost unless the selling price for them is reduced by $0.13. The effect of reducing the selling price will be to decrease firm profits by B: E: F: 15,0626 A: $7,826 C: $16,454 : 6.954 D: $23,859 422,859 134,595 556,163 $11,348 $34,595 $50,163