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Last year, X Company sold 61,000 units of its only product for $18.00 each. Total costs were as follows: S395,280 126,880 Cost of goods sold
Last year, X Company sold 61,000 units of its only product for $18.00 each. Total costs were as follows: S395,280 126,880 Cost of goods sold Variable Fixed Selling and administrative Variable Fixed SG4,050 67,710 At the end of the year, a company offered to buy 4,270 units of the product for 511.00 each instead of 518.00. X Company's production manager thought that the special order units would probably require additional variable costs per unit of $1.11 and the rental of special equipment for 51,500. X Company had the capacity to produce the additional units, and there would have been no selling and administrative costs for the special order. But X Company still rejected the order. If X Company had accepted the special order, firm profits would have increased by There was concern that regular customers would have found out about the special order, and X Company's regular sales this year would have fallen by 950 units. The result of these lost sales would have been to reduce X Company's profits this year by
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