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Questions 1 and 2 refer to the following information : Near the end of 2020, X Company had produced 61,300 units of its only product

Questions 1 and 2 refer to the following information:

Near the end of 2020, X Company had produced 61,300 units of its only product and had sold them for $12.60 each. Per-unit costs were:

Direct materials $1.70
Direct labor 1.10
Variable overhead 3.20
Fixed overhead 1.80
Variable selling and administration 1.40
Fixed selling and administration 1.20
Total $10.40

Just before the year ended, a company offered to buy 4,660 units for $11.28 each. X Company had the capacity to produce the additional 4,660 units, but because the special order product was slightly different than the regular product, direct material costs were expected to increase to $1.85 per unit, and some special equipment would have to be rented for a total of $20,000.

1. What would profit have been on the special order?

A: $-1,421 B: $-1,606 C: $-1,815 D: $-2,050 E: $-2,317 F: $-2,618
Tries 0/99

2. Assume that X Company's marketing manager thought that if the company had accepted the special order, regular sales in 2021 would have fallen by 1,150 units. If the marketing manager was correct, the effect of this fall in regular sales would been to decrease company profit in 2021 by

A: $5,980 B: $6,757 C: $7,636 D: $8,629 E: $9,750 F: $11,018image text in transcribed
Questions 1 and 2 refer to the following information: Near the end of 2020, X Company had produced 61,300 units of its only product and had sold them for $12.60 each. Per-unit costs were $1.70 Direct materials Direct labor Variable overhead Fixed overhead Variable selling and administration Fixed selling and administration Total 1.10 3.20 1.80 1.40 1.20 $10.40 Just before the year ended, a company offered to buy 4,660 units for $11.28 each. X Company had the capacity to produce the additional 4,660 units, but because the special order product was slightly different than the regular product, direct material costs were expected to increase to $1.85 per unit, and some special equipment would have to be rented for a total of $20,000. 1. What would profit have been on the special order? D: 5-2,050 E: $-2,317| OF: 5-2,618 OA: $-1,421 OB: $-1,606 OC: $-1,815 Submit Answer Tries 0/99 2. Assume that X Company's marketing manager thought that if the company had accepted the special order, regular sales in 2021 would have fallen by 1,150 units. If the marketing manager was correct, the effect of this fall in regular sales would been to decrease company profit in 2021 by A: $5,980 Submit Answer B: $6,757 Oc: $7,636 OD: $8,629 OE: $9,750 OF: $11,018 Tries 0/99

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