Question
At the end of the year, a company offered to buy 4,460 units of a product from X Company for a special price of $12.00
At the end of the year, a company offered to buy 4,460 units of a product from X Company for a special price of $12.00 each instead of the company's regular price of $19.00 each. The following information relates to the 69,700 units of the product that X Company made and sold to its regular customers during the year:
Revenue | $1,324,300 | ||
Cost of goods sold | 596,632 | ||
Selling and administrative costs | 165,189 | ||
Profit | $562,479 |
Fixed cost of goods sold for the year was $154,037, and fixed selling and administrative costs were $87,125.
6. Profit on the special order is
7. Consider the following three changes. Direct material costs on the special order will increase by $0.88 per unit, direct labor costs on the special order will decrease by $0.35 per unit, and X Company will have to rent special equipment for $1,500. The effect of these changes will be to reduce profit on the special order by
8. The marketing manager thinks that all of X Company's regular customers can be retained if the regular selling price is reduced by $0.51. If next year's unit sales turn out to be the same as this year's, the effect of reducing the regular selling price will be to decrease X Company's profits by
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started