Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Actually i did 6 and 7, i just don't know how to do 5 and 8, please help Questions 5, 6, and 7 refer to

image text in transcribedimage text in transcribed

Actually i did 6 and 7, i just don't know how to do 5 and 8, please help

Questions 5, 6, and 7 refer to the following information Last year, X Company sold 63.600 units of its only product for $17.00 each. Total costs were as follows: Cost of goods sold Variable Fixed 8389,868 136,104 Selling and administrative Variable $71.232 80.772 Fixed At the end of the year, a company offered to buy 4.860 units of the product but only for $12.00 each. X Company had the capacity to produce the additional units, and even though there would have been no additional selling and administrative costs, it rejected the offer. 8 pt 5. If X Company had accepted the special order, firm profits would have increased by 5. AO $17.812 BO $20,840 DO $28,528 FO $39,052 CO $24,383 EO $33,378 8 pt 6. X Company's production manager thought that the special order units might have required additional direct material and direct labor costs per unit of $0.84 and $0.25, respectively, and the rental of special equipment for $1,000. The combined effect of these changes would have been to reduce the special order profit by 6 DO $8,376 BO $4,735 CO $6,297 AO $3.560 EO $11,139 FO $14,815 8 pt 7. X Company's marketing manager felt that in order for regular sales to continue at 63,600 units this year, the company would have had to reduce the regular selling price this year to $16.61. The result of this price reduction would have been to reduce X Company's profits this year by 7 AO $12,700 CO $19,843 DO $24,804 BO $15,875 EO $31,005 FO $38,756 8 pt The following income statement is for X Company and its only two products - A and B: Product B $85,440 46,138 $39.302 Product A Total $91,510 53,076 $38,434 $176,950 99,213 $77,737 Sales Variable Costs Contribution margin Fixed costs: 32,950 29,130 $22.778 21,670 5,510 $11,254 54,620 34,640 $-11,523 Avoidable Unavoidable Profit Because Product B is showing a loss, X Company is considering dropping it and saving its avoidable fixed costs. If it drops Product B, X Company's new profits will be 8. AO $-14,301 EO S-34,914 FO S-43,642 BO S-17,876 CO $-22,345 DO S-27,931

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Design Of Cost Management Systems The Text Cases And Readings

Authors: Robin Cooper

1st Edition

0132041243, 978-0132041249

More Books

Students also viewed these Accounting questions

Question

What are some of the most important KPIs in warehouse management?

Answered: 1 week ago

Question

Define job pricing. What is the purpose of job pricing?

Answered: 1 week ago

Question

What are some companywide pay plans? Briefly discuss each.

Answered: 1 week ago