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Questions 4 and 5 refer to the following problem: At the end of the year, a company offered to buy 5,000 units of a product
Questions 4 and 5 refer to the following problem: At the end of the year, a company offered to buy 5,000 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 62,300 units of the product that X Company has already made and sold to its regular customers: Sales Cost of goods sold Gross margin Selling and administrative costs Profit $1,059,100 508,991 $550,109 145,782 $404,327 For the year, fixed cost of goods sold were $118,993, and fixed selling and administrative costs were $80,367. The special order product has some unique features that will require additional material costs of $0.86 per unit and the rental of special equipment for $3,000. 4. Profit on the special order would be E: $50,533 OF: $67,210 A: $16,150 OB: $21,480OC: $28,568 OD: $37,995 Submit Answer 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 $0.13. The effect of reducing the selling price will be to decrease firm profits by A: $2,657 OB: $3,852C: $5,586 OD: $8,099 OE: $11,744 OF: $17,028 Submit Answer Tries 0/99
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