At the end of the year, a company offered to buy 4,690 units of a product...

At the end of the year, a company offered to buy 4,690 units of a product from X Company for a special price of $12.00 each instead of the company's regular price of $19.00 each. The following information relates to the 67,200 units of the product that X Company made and sold to its regular customers during the year:

	Per-Unit	Total
Cost of goods sold	$8.01	$538,272
Period costs	2.53	170,016
Total	$10.54	$708,288

Fixed cost of goods sold for the year were $130,368, and fixed period costs were $73,920. Variable period costs include selling commissions equal to 2% of revenue.

6. Profit on the special order is

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7. Assume the following two changes for the special order: 1) variable cost of goods sold will increase by $0.90 per unit, and 2) there will be no selling commissions. What would be the effect of these two changes on the special order profit?

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8. There is concern that regular customers will find out about the special order, and X Company's regular sales will fall by 500 units. As a result of these lost sales, X Company's profits would fall by

Expert Solution

ekkarill92 answered 2 months ago

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