Question
Please answer ALL of the questions! At the end of the year, a company offered to buy 4,100 units of a product from X Company
Please answer ALL of the questions!
At the end of the year, a company offered to buy 4,100 units of a product from X Company for a special price of $12.00 each instead of the company's regular price of $18.00 each. The following information relates to the 68,400 units of the product that X Company made and sold to its regular customers during the year:
Per-Unit | Total | ||
Cost of goods sold | $9.43 | $645,012 | |
Period costs | 2.60 | 177,840 | |
Total | $12.03 | $822,852 |
Fixed cost of goods sold for the year were $151,848, and fixed period costs were $78,660. Variable period costs include selling commissions equal to 4% of revenue. 6. Profit on the special order is
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7. Assume the following two changes for the special order: 1) variable cost of goods sold will decrease by $0.87 per unit, and 2) there will be no selling commissions. What would be the effect of these two changes on the special order profit?
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8. There is concern that regular customers will find out about the special order, and X Company's regular sales will fall by 700 units. As a result of these lost sales, X Company's profits would fall by
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