Question
In: Accounting
Please answer ALL of the questions! At the end of the year, a company offered to...
Please answer ALL of the questions!
At the end of the year, a company offered to buy 4,100 units of
a product from X Company for a special price of $12.00 each instead
of the company's regular price of $18.00 each. The following
information relates to the 68,400 units of the product that X
Company made and sold to its regular customers during the
year:
| Per-Unit | Total | ||
| Cost of goods sold | $9.43 | $645,012 | |
| Period costs | 2.60 | 177,840 | |
| Total | $12.03 | $822,852 | |
Fixed cost of goods sold for the year were $151,848, and fixed
period costs were $78,660. Variable period costs include selling
commissions equal to 4% of revenue.
6. Profit on the special order is
| Tries 0/3 |
7. Assume the following two changes for the special order: 1)
variable cost of goods sold will decrease by $0.87 per unit, and 2)
there will be no selling commissions. What would be the effect of
these two changes on the special order profit?
| Tries 0/3 |
8. There is concern that regular customers will find out about the
special order, and X Company's regular sales will fall by 700
units. As a result of these lost sales, X Company's profits would
fall by
| Tries 0/3 |
Solutions
Expert Solution
6. Profit on the special order is
| Total cost of goods sold | $645012 |
| Less Fixed Cost | $151848 |
| Variable cost of goods sold | $493164 |
| Variable cost of goods sold per unit | $7.21 |
| Total Selling and Administrative | $177840 |
| Less Fixed Cost | $78660 |
| Variable Selling and Administrative | $99180 |
| Variable Selling and Administrative | 1.45 |
| Sales 4100*12 | $49200 | |
| Cost of goods sold 4100 units *7.21 | 29561 | |
| Variable Selling and Administrative 4100*1.45 | 5945 | $35506 |
| Profit on the special order | $13694 | |
7. Assume the following two changes for the special order: 1) variable cost of goods sold will decrease by $0.87 per unit, and 2) there will be no selling commissions. What would be the effect of these two changes on the special order profit?
| Sales 4100*12 | 49200 | |
| Cost of goods sold 4100 units *(7.21-.87) | 25994 | |
| Variable Selling and Administrative 4100*(1.45-18*4%) | 2993 | 28987 |
| Profit on the special order | 20213 | |
Effect on the Profit will $20213-$13694=$6519
8. There is concern that regular customers will find out about the special order, and X Company's regular sales
| Sales Revenue Lost $ 700*18 | $ 12,600.00 | |
| Less Variable Cost | ||
| Cost of goods sold 700*7.21 | $ 5,047.00 | |
| Selling and Administrative 700*1.45 | $ 1,015.00 | $ 6,062.00 |
| Company's profits would fall by | $ 6,538.00 |
ekkarill92 answered 3 months agoRelated Solutions
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At the end of the year, a company offered to buy 4,860 units of a product...
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At the end of the year, a company offered to buy 4,580 units of a product...
At the end of the year, a company offered to buy 4,580 units of
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For the year, fixed cost of goods sold...
At the end of the year, a company offered to buy 4,610 units of a product...
At the end of the year, a company offered to buy 4,610 units of
a product from X Company for a special price of $11.00 each instead
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and sold to its regular customers:
Total
Per-Unit
Revenue
$1,164,700
$19.00
Cost of Goods Sold
Variable
410,097
6.69
Fixed
115,244
1.88
Selling and Administrative Costs
Variable
62,526
1.02
Fixed
63,139
1.03 ...
At the end of the year, a company offered to buy 4,200 units of a product...
At the end of the year, a company offered to buy 4,200 units of
a product from X Company for a special price of $11.00 each instead
of the company's regular price. The following information relates
to the 69,100 units of the product that X Company has already made
and sold to its regular customers:
Total
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Revenue
$1,312,900
$19.00
Cost of Goods Sold
Variable
463,661
6.71
Fixed
128,526
1.86
Selling and Administrative Costs
Variable
95,358
1.38
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1.04 ...
At the end of the year, a company offered to buy 4,650 units of a product...
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For the year, variable cost of goods sold...
1. At the end of the year, a company offered to buy 4,510 units of a...
1. At the end of the year, a company offered to buy 4,510 units
of a product from X Company for $12.00 each instead of the
company's regular price of $17.00 each. The following income
statement is for the 62,400 units of the product that X Company has
already made and sold to its regular customers:
Sales $1,060,800
Cost of goods sold 504,192
Gross margin $556,608
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Profit $400,608
For the year, fixed cost of goods...
At the end of the year, a company offered to buy 4,450 units of a product...
At the end of the year, a company offered to buy 4,450 units of
a product from X Company for a special price of $11.00 each instead
of the company's regular price of $17.00 each. The following
information relates to the 62,400 units of the product that X
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year:
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Total
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Period costs
2.74
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Total
$10.54
$657,696
Fixed cost of goods sold for...
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