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At the end of the year, a company offered to buy 4,540 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 4,540 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 66,600 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 $1,132,200 557,442 $574,758 145,854 $428,904 For the year, fixed cost of goods sold were $125,208, and fixed selling and administrative costs were $79,254. The special order product has some unique features that will require additional material costs of $0.86 per unit and the rental of special equipment for $5,000. 4. Profit on the special order would be DA: $3,752 Submit Answer B: $4,390 Tries 0/99 C: $5,136 OD: $6,009 E: $7,031 OF: $8,226 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 $0.11. The effect of reducing the selling price will be to decrease firm profits by D: $15,403 E: $22,334F: $32,385 A: $5,052 Submit Answer B: $7,326C: $10,623 Tries 0/99
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