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SSIOTS : T I-IIIIIIIIIIulu At the end of the year, a company offered to buy 4,760 units of a product from X Company for $12.00
SSIOTS : T I-IIIIIIIIIIulu At the end of the year, a company offered to buy 4,760 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 60,400 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 $1,026,800 523,668 $503,132 149,188 $353,944 For the year, variable cost of goods sold were $402,868, and variable selling and administrative costs were $77,312. 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 $5,000. 4. Profit on the special order would be DER 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 $0.12. The effect of reducing the selling price will be to decrease firm profits by Tries 0/3
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