At the end of the year, a company offered to buy 4,810 units of a product from X
ID: 2452960 • Letter: A
Question
At the end of the year, a company offered to buy 4,810 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 68,400 units of the product that X Company has already made and sold to its regular customers:
The special order product has some unique features that will require additional material costs of $0.76 per unit and the rental of special equipment for $5,000.
5. Profit on the special order would be :___________
[ONLY TWO TRIES] 6. The marketing manager thinks that if X Company accepts the special order, regular customers will be lost, with demand falling by 500 units. The effect of this loss of sales will be to decrease firm profits by:__________
Total Per-Unit Revenue $1,299,600 $19.00 Cost of Goods Sold Variable 426,132 6.23 Fixed 147,060 2.15 Selling and Administrative Costs Variable 80,028 1.17 Fixed 88,920 1.30 Profit $557,460 $8.15Explanation / Answer
The special order product has some unique features that will require additional material costs of $0.76 per unit and the rental of special equipment for $5,000.
5. Profit on the special order would be :___________
The marketing manager thinks that if X Company accepts the special order, regular customers will be lost, with demand falling by 500 units. The effect of this loss of sales will be to decrease firm profits by
Per-Unit Revenue 12 57720 Variable Cost of Goods Sold 6.99 33621.9 Selling and Administrative Costs 1.17 5627.7 Fixed Rental of special equipment 5000 Total Expense 44249.6 Profit 13470.4Related Questions
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