At the end of the year, a company offered to buy 4,960 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 66,300 units of the product that X Company has already made and sold to its regular customers:

Sales		$1,127,100
Cost of goods sold		556,920
Gross margin		$570,180
Selling and administrative costs		160,446
Profit		$409,734

For the year, variable cost of goods sold were $416,364, and variable selling and administrative costs were $88,179. The special order product has some unique features that will require additional material costs of $0.78 per unit and the rental of special equipment for $3,000. 4. Profit on the special order would be

A: $9,946

B: $11,636

C: $13,615

D: $15,929

E: $18,637

F: $21,805

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 $0.14. The effect of reducing the selling price will be to decrease firm profits by

A: $6,433

B: $7,269

C: $8,214

D: $9,282

E: $10,489

F: $11,852