Question
During the year, X Company produced and sold 68,500 units of one of its products. The following is the related revenue and cost information: Revenue
During the year, X Company produced and sold 68,500 units of one of its products. The following is the related revenue and cost information:
Revenue | $1,164,500 | ||
Cost of goods sold | 541,150 | ||
Selling and administrative costs | 261,670 | ||
Profit | $361,680 |
Total variable cost of goods sold were $415,110, and total variable selling and administrative costs were $175,360.
At the end of the year, a company offered to buy 4,970 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
A: $11,829 | B: $13,366 | C: $15,104 | D: $17,067 | E: $19,286 | F: $21,793 |
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 $0.38. 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
A: $26,030B: $34,620C: $46,044D: $61,239E: $81,448F: $108,326
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