X Company produces 62,200 units of its regular product each year and sells each one for $14.00. The following cost information is available:

	Total	Per-Unit
Direct materials	$121,912	$1.96
Direct labor	63,444	1.02
Variable overhead	182,868	2.94
Fixed overhead	141,816	2.28
Variable selling	69,664	1.12
Fixed selling	70,908	1.14
Total	$650,612	$10.46

A company has offered to buy 4,950 units for $13.43 each. Because the special order product is slightly different than the regular product, direct material costs will increase to $2.16 per unit, and some special equipment will have to be rented for a total of $14,000.

1. What would profit on the special order be?

A: $-45,000

B: $-23,000

C: $-14,000

D: $16,640

E: $31,000

F: $35,000

Tries 0/99

2. Assume that if X Company accepts the special order, regular sales would fall by 1,100 units. The effect of this fall in regular sales would be to decrease company profit by

A: $7,656

B: $8,958

C: $10,480

D: $12,262

E: $14,346

F: $16,785