X Company produces and sells 61,100 units of its regular product each year for $13.00 each. The following cost information relates to this production:

	Total	Per-Unit
Direct materials	$114,257	$1.87
Direct labor [all variable]	95,316	1.56
Variable overhead	180,245	2.95
Fixed overhead	133,809	2.19
Variable selling	87,373	1.43
Fixed selling	87,984	1.44

A company has offered to buy 4,520 units for $11.86 each. Because the special order product is slightly different than the regular product, direct material variable costs will increase by $0.10 per unit, and some special equipment will have to be rented at a cost of $11,000. 1. Profit on the special order is

Part 2

X Company produces and sells 61,100 units of its regular product each year for $13.00 each. The following cost information relates to this production:

	Total	Per-Unit
Direct materials	$114,257	$1.87
Direct labor [all variable]	95,316	1.56
Variable overhead	180,245	2.95
Fixed overhead	133,809	2.19
Variable selling	87,373	1.43
Fixed selling	87,984	1.44

A company has offered to buy 4,520 units for $11.86 each. Because the special order product is slightly different than the regular product, direct material variable costs will increase by $0.10 per unit, and some special equipment will have to be rented at a cost of $11,000. 1. Profit on the special order is

Part 3

2. Assume that if X Company accepts the special order, regular sales will fall to 60,000 units. Independent of #1, the effect of the fall in regular sales will be to decrease company profit by