The following cost functions apply to X Company's regular production and sales during the year: Cost of goods sold: $6.05 (X) + $146,520 Selling and administrative expenses: $1.05 (X) + $69,960 where X is the number of units produced and sold. During the year, X Company sold 66,000 units for $18.00 each. At the end of the year, a company offered to buy 4,460 units but was only willing to pay $12.00 each. X Company had the capacity to produce the additional 4,460 units.

5. If X Company had accepted the special order, firm profits would have increased by

6. Consider the following three changes. Direct material costs on the special order would have increased by $0.71 per unit, direct labor costs on the special order would have decreased by $0.42 per unit, and X Company would have had to rent special equipment for $1,000. Independent of your answer to (5), the effect of these changes would have been to reduce profit on the special order by

7. In order to retain all of X Company's regular customers, it would have had to reduce the regular selling price by $0.37. If the selling price were reduced and next year's unit sales turned out to be the same as this year's sales, firm profits would have fallen by