Per unit | ||
Sales (68,400*$19) | $1,299,600 | $19 |
Variable cost of goods sold | $387,828 | $5.67 |
Variable selling and administrative expenses | $77,292 | $1.13 |
Contribution margin | $834,480 | $12.2 |
Fixed cost of goods sold | $149,796 | |
Fixed selling and administrative expenses | $102,600 | |
Net income | $582,084 |
5. Relevant costs are variable cost of goods sold.
Increase in profit = ($11 - $5.67) * 4,090 = $21,800 (rounded to 0 decimal places)
6. Relevant costs = Variable cost of goods sold + Additional costs + Special equipment
= ($5.67 + $0.9 + $0.27) * 4,090 + $1,500
= $29,475.6
Profit from special order = 4,090 * $11 = $44,990
Profit = $44,990 - $29,475.6
= $15,514.4
Reduction in profit = $21,800 - $15,514.4
= $6,286 (rounded to 0 decimal places)
7.
Per unit | ||
Sales (68,400*$19) | $1,277,028 | $18.67 |
Variable cost of goods sold | $387,828 | $5.67 |
Variable selling and administrative expenses | $77,292 | $1.13 |
Contribution margin | $811,908 | $11.87 |
Fixed cost of goods sold | $149,796 | |
Fixed selling and administrative expenses | $102,600 | |
Net income | $559,512 |
Reduction in profit = $582,084 - $559,512 = $22,572
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