Actually i did 6 and 7, i just don't know how to do 5 and 8, please help
Homework Answers
Solution 5:
Variable cost of goods sold per unit = $389,868 / 63600 = $6.13 per unit
If X company accept the special order then profit will increase by = ($12 - $6.13) * 4860 = $28,528
Hence option D is correct.
Solution 8:
Net financial advantage (disadvantage) on dropping product B = Saving in fixed costs - Loss of contribution margin
= $32,950 - $39,302 = -$6,352
X company's new profit = -$11,523 - $6,352 = -$17,876
Hence option B is correct.
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