Question
At the end of the year, a company offered to buy 4,750 units of a product from X Company for $12.00 each instead of the
At the end of the year, a company offered to buy 4,750 units of a product from X Company for $12.00 each instead of the company's regular price of $18.00 each. The following income statement is for the 68,200 units of the product that X Company has already made and sold to its regular customers:
Sales | $1,227,600 | |
Cost of goods sold | 538,780 | |
Gross margin | $688,820 | |
Selling and administrative costs | 173,228 | |
Profit | $515,592 |
For the year, variable cost of goods sold were $408,518, and variable selling and administrative costs were $101,618. The special order product has some unique features that will require additional material costs of $0.82 per unit and the rental of special equipment for $2,500. Profit on the special order would be...?
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