Questions 4 and 5 refer to the following problem:

At the end of the year, a company offered to buy 4,970 units of a product from X Company for $12.00 each instead of the company's regular price of $17.00 each. The following income statement is for the 60,200 units of the product that X Company has already made and sold to its regular customers:

Sales		$1,023,400
Cost of goods sold		511,098
Gross margin		$512,302
Selling and administrative costs		144,480
Profit		$367,822

For the year, variable cost of goods sold were $386,484, and variable selling and administrative costs were $69,230. The special order product has some unique features that will require additional material costs of $0.83 per unit and the rental of special equipment for $3,000. 4. Profit on the special order would be

Tries 0/3

5. The marketing manager thinks that if X Company accepts the special order, regular customers will be lost unless the selling price for them is reduced by $0.20. The effect of reducing the selling price will be to decrease firm profits by