t the end of the year, a company offered to buy 4,140 units of a product from X Company for $11.00 each instead of the company's regular price of $19.00 each. The following income statement is for the 65,400 units of the product that X Company has already made and sold to its regular customers:

Sales $1,242,600

Cost of goods sold 527,778

Gross margin $714,822

Selling and administrative costs 147,804

Profit $567,018

For the year, fixed cost of goods sold were $119,028, and fixed selling and administrative costs were $79,788. The special order product has some unique features that will require additional material costs of $0.80 per unit and the rental of special equipment for $3,000.

4. Profit on the special order would be

A: $7,733 B: $9,047 C: $10,585 D: $12,385 E: $14,490 F: $16,954

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: $2,786 B: $3,482 C: $4,353 D: