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At the end of the year, a company offered to buy 4,390 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 4,390 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 62,100 units of the product that X Company has already made and sold to its regular customers: $1,117,800 483,759 $634,041 Sales Cost of goods sold Gross margin Selling and administrative costs Profit 154,008 $480,033 For the year, variable cost of goods sold were $344,034, and variable selling and administrative costs were $62,721. The special order product has some unique features that will require additional material costs of $0.81 per unit and the rental of special equipment for $3,500. 4. Profit on the special order would be C: $17,083 D: $19,987 E: $23,385 DF: $27,361 A: $12,480 B: $14,601 Submit Answer 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 $0.10. The effect of reducing the selling price will be to decrease firm profits by C: $2,954 D: $4,283 E: $6,210 F: $9,004 A: $1,405 B: $2,037 Submit Answer Tries 0/99
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