Question
#4. 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
#4. 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 $18.00 each. The following income statement is for the 68,300 units of the product that X Company has already made and sold to its regular customers:
Sales | $1,229,400 | |
Cost of goods sold | 538,204 | |
Gross margin | $691,196 | |
Selling and administrative costs | 152,992 | |
Profit | $538,204 |
For the year, variable cost of goods sold were $410,483, and variable selling and administrative costs were $72,398. The special order product has some unique features that will require additional material costs of $0.74 per unit and the rental of special equipment for $3,500. 4. Profit on the special order would be?
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