Question
At the end of the year, a company offered to buy 4,920 units of a product from X Company for a special price of $12.00
At the end of the year, a company offered to buy 4,920 units of a product from X Company for a special price of $12.00 each instead of the company's regular price of $19.00 each. The following information relates to the 61,200 units of the product that X Company made and sold to its regular customers during the year:
Per-Unit | Total | ||
Cost of goods sold | $7.61 | $465,732 | |
Period costs | 2.30 | 140,760 | |
Total | $9.91 | $606,492 |
Fixed cost of goods sold for the year were $113,832, and fixed period costs were $70,380. Variable period costs include selling commissions equal to 2% of revenue. 5. Profit on the special order is $25,092 (this is right)
6. Assume the following two changes for the special order: 1) variable cost of goods sold will decrease by $0.80 per unit, and 2) there will be no selling commissions. What will be the effect of these two changes on the special order profit?______
The following information is for X Company's two products, A and B, last year:
Product A | Product B | ||
Sales | $92,940 | $94,280 | |
Total variable costs | 51,117 | 56,568 | |
Total fixed costs | 52,100 | 30,530 | |
Profit | $-10,277 | $7,182 |
Because of the reported loss for Product A, X Company is considering dropping it. Further analysis reveals that $25,130 of Product A's fixed costs and $7,510 of Product B's fixed costs are common costs that the company allocates to the two products. 7. If X Company drops Product A, company profits will change by $-14,853 (this is right)
8. Assume that sales of Product B can be increased by $17,510 if Product A is dropped. What will be the effect of this increase on company profits? _____.
NEED HELP WITH 6 AND 8
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