Question
During the year, X Company sold 62,400 units of one of its products for $19.00 each. The following cost functions are for these regular production
During the year, X Company sold 62,400 units of one of its products for $19.00 each. The following cost functions are for these regular production and sales levels:
- Cost of goods sold: $6.55X + $119,808
- Selling and administrative expenses: $3.02X + $72,384
Variable selling and administrative expenses include sales commissions equal to 4% of sales. At the end of the year, a company offered to buy 4,130 units but was only willing to pay $11.00 each. X Company had the capacity to produce the 4,130 units. 4. If X Company had accepted the special order, firm profits would have increased by
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5. Now assume that there would not have been sales commissions for the special order. If X Company had accepted the special order, firm profits would have increased by
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