Question
During the year, X Company produced and sold 60,100 units of one of its products. The following is the related revenue and cost information: Revenue
During the year, X Company produced and sold 60,100 units of one of its products. The following is the related revenue and cost information:
Revenue | $1,141,900 | ||
Cost of goods sold | 492,820 | ||
Selling and administrative costs | 231,385 | ||
Profit | $417,695 |
Total variable cost of goods sold were $382,837, and total variable selling and administrative costs were $168,881.
At the end of the year, a company offered to buy 4,760 units but was only willing to pay $11.00 each.
4. If X Company had accepted the special order, firm profits would have increased by?
5. There is concern that regular customers will find out about the special order, and in order to retain all of the X Company's regular customers, the regular selling price would have to be reduced by $0.33. If the selling price were reduced and next year's unit sales turn out to be the same as this year's sales, firm profits would fall by?
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