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Questions 4 and 5 refer to the following problem: At the end of the year, a company offered to buy 4,900 units of a product

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Questions 4 and 5 refer to the following problem: At the end of the year, a company offered to buy 4,900 units of a product from X Company for $11.00 each instead of the company's regular price of $18.00 each. The following income statement is for the 60,600 units of the product that X Company has already made and sold to its regular customers: $1,090,800 Sales Cost of goods 464,802 sold $625,998 Gross margin Selling and administrative costs Profit 161,196 $464,802 For the year, fixed cost of goods sold were $115,140, and fixed selling and administrative costs were $82,416. The special order product has some unique features that will require additional material costs of $0.79 per unit and the rental of special equipment for $5,000. 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 $0.13. The effect of reducing the selling price will be to decrease firm profits by 120** Tries 0/3

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