At the end of the year, a company offered to buy 4,120 units of a product from X Company for $12.00 each instead of the company's regular price of $17.00 each. The following income statement is for the 61,700 units of the product that X Company has already made and sold to its regular customers:Sales$1,048,900Cost of goods sold498,536Gross margin$550,364Selling and administrative costs163,505Profit$386,859

For the year, variable cost of goods sold were $367,115, and variable selling and administrative costs were $82,061. The special order product has some unique features that will require additional material costs of $0.83 per unit and the rental of special equipment for $2,500.

4. Profit on the special order would be

A: $6,926B: $8,657C: $10,821D: $13,527E: $16,908F: $21,136Tries 0/99

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 $0.15. The effect of reducing the selling price will be to decrease firm profits by

A: $9,255B: $10,828C: $12,669D: $14,823E: $17,343F: $20,291