At the end of the year, a company offered to buy 4,000 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 60,600 units of the product that X Company has already made and sold to its regular customers:

Sales $1,090,800

Cost of goods sold

555,096 Gross margin

$535,704

Selling and administrative costs 140,592

Profit $395,112

For the year, variable cost of goods sold were $422,382, and variable selling and administrative costs were $73,932. The special order product has some unique features that will require additional material costs of $0.84 per unit and the rental of special equipment for $4,500.

4. Profit on the special order would be Tries 0/3 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 $0.15. The effect of reducing the selling price will be to decrease firm profits by

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 $0.15. The effect of reducing the selling price will be to decrease firm profits by