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At the end of the year, a company offered to buy 4,980 units of a product from X Company for $11.00 each instead of the
At the end of the year, a company offered to buy 4,980 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 64,200 units of the product that X Company has already made and sold to its regular customers: Sales Cost of goods sold Gross margin Selling and administrative costs Profit $1,091,400 567,528 $523,872 157,932 $365,940 For the year, fixed cost of goods sold were $139,956, and fixed selling and administrative costs were $66,126. The special order product has some unique features that will require additional material costs of $0.71 per unit and the rental of special equipment for $2,500. 4. Profit on the special order would be E: $25,779 F: $37,380 A: $5,832 B: $8,456 OC: $12,261 OD: $17,779 Tries 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 $0.19. The effect of reducing the selling price will be to decrease firm profits by A: $2,759 B: $4,001 OC: $5,802 OD: $8,412 OE: $12,198 OF: $17,687 * Tries 0/99
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