Question
X Company produces and sells 69,400 units of its regular product each year for $14.00 each. The following Cost information relates to this production: Total
X Company produces and sells 69,400 units of its regular product each year for $14.00 each. The following Cost information relates to this production: Total Per-Unit Direct materials $133,248 $1.92 Direct labor (all variable) $82,586 $1.19 Variable overhead $192,238 $2.77 Fixed overhead $140,188 $2.02 Variable selling $73,564 $1.06 Fixed selling $77,728 $1.12 A company has offered to buy 4,220 units for $11.99 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 $19,000. Profit on the special order is Assume that if X Company accepts the special order, it will have to lower the selling price on each of its regular units to $13.40. Independent of #1, the effect of lowering the selling price will be to decrease company profits by
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