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Questions 4 and 5 refer to the following problem: At the end of the year, a company offered to buy 4,390 units of a product
Questions 4 and 5 refer to the following problem: At the end of the year, a company offered to buy 4,390 units of a product from X Company for $11.00 each instead of the company's regular price of $17.00 each. The following income statement is for the 67,500 units of the product that X Company has already made and sold to its regular customers: $1,147,500 591,300 $556,200 Sales Cost of goods sold Gross margin Selling and administrative costs Profit 146,475 $409,725 For the year, fixed cost of goods sold were $141,750, and fixed selling and administrative costs were $74,925. The special order product has some unique features that will require additional material costs of $0.87 per unit and the rental of special equipment for $3,000. 4. Profit on the special order would be A: $2,422B : $3,222 C: $4,285 D: $5,699 E: $7,580 F: $10,081|| Tries 0/99 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 $0.15. The effect of reducing the selling price will be to decrease firm profits by A: $6,983B: $10,125C: $14,681 OD: $21,288 E: $30,867 F: $44,758
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