Solution 5:
Variable cost of goods sold per unit = $439,926 / 68100 = $6.46 per unit
If X company accept the special order then profit will increase by = ($11 - $6.46) * 4880 = $22,155
Hence option B is correct.
Solution 6:
Reduction in special order profit by = ($0.86 + $0.23) * 4880 + $2,000 = $7,319
Hence option D is correct.
Solution 7:
Price reduction would reduce X company profit by = (68100*$0.55) = $37,455
Hence option F is correct.
Questions 5, 6, and 7 refer to the following information X Company sold 68,100 units of...
Questions 5, 6, and 7 refer to the following information Last year, X Company sold 68,100 units of its only product for $18.00 each. Total costs were as follows: Cost of goods sold Variable S439,926 Fixed 138,924 Selling and administrative Variable $78,315 Fixed 88.530 At the end of the year, a company offered to buy 4,880 units of the product but only for $11.00 each. X Company had the capacity to produce the additional units, and even though there would...
Questions 5, 6, and 7 refer to the following information Last year, X Company sold 68,100 units of its only product for $18.00 each. Total costs were as follows: Cost of goods sold Variable S439,926 Fixed 138,924 Selling and administrative Variable $78,315 Fixed 88.530 At the end of the year, a company offered to buy 4,880 units of the product but only for $11.00 each. X Company had the capacity to produce the additional units, and even though there would...
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Questions 5, 6, and 7 refer to the folle Last year, X Companr sold 66.500 units of its only product for $18.00 each. Total costs were as Sollowy Cost of goods sald Variable Fixed Selling and administrative Variable S418,950 128.345 s94.430 73.150 Fixed At the end of the year, a company offered to bay 4.690 units of the product but only for S12.00 each X Company had the capacity to prodace the additional units, and even though there would hae...
Questions 5, 6, and 7 refer to the following information Last year, X Company sold 65,300 units of its only product for $17.00 each. Total costs were as follows: Cost of goods sold Variable 8410,084 Fixed 124,723 Selling and administrative Variable $74.442 Fixed 79,013 At the end of the year, a company offered to buy 4.120 units of the product but only for $11.00 each. X Company had the Capacity to produce the additional units and even though there wild...
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