he following information is for X Company\'s two products, A and B: 7. If X Comp
ID: 2463696 • Letter: H
Question
he following information is for X Company's two products, A and B:
7. If X Company drops Product A because it shows a loss, what will be the effect on firm profits?
8. Assume that if X Company drops Product A, it can use the vacant space to increase sales of Product B by $37,200, but $3,000 of additional fixed costs will be incurred. This use of the vacant space will result in an increase in X Company's profits of
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At the end of the year, a company offered to buy 4,830 units of a product from X Company for $12.00 each instead of the company's regular price of $19.00 each. The following functional income statement is for the 64,900 units of the product that X Company has already made and sold to its regular customers:
Fixed cost of goods sold for the year was $120,065, and fixed selling and administrative costs were $75,933. The special order product has some unique features that will require additional material costs of $0.85 per unit and the rental of special equipment for $3,000.
5. Profit on the special order would be ?
6. Assume the following fact: regular variable selling and administrative costs include sales commissions equal to 2% of sales, but there will be no sales commissions on the special order. This will cause the special order profit to increase by?
CAN YOU PLEASE ANSWER ALL OF THEM !!!!!!!!!
Product A Product B Revenue $92,000 $92,000 Total variable costs 46,920 51,520 Total contribution margin $45,080 $40,480 Total fixed costs Avoidable 33,984 14,000 Unavoidable 23,616 14,000 Profit $-12,520 $12,480Explanation / Answer
Product B and company X total profit revenue 92000 Total variable costs 51520 Total contribution margin 40480 Total fixed costs Avoidable 14000 Unavoidable 23616 37616 Loss $-12,520 ($11,136) Firm profit will be nrgative and loss of 11136 would be recorded answer no 8 sales of B additional sales total new sales revenue 92000 37200 129200 Total variable costs 51520 Total contribution margin 77680 Total fixed costs Avoidable 14000 Unavoidable 23616 37616 additional fixed cost 3000 -4500 net profit 23064 1000 1000 profit will increase by 23064 1000 cost of goods sold per unit 543862 64900 8.38 0.85 cost of goods sold per unit 9.23 no of units unit cost sales 4830 12 57960 variable cost 4830 9.23 44580.9 contribution margin 13379.1 rental of special equipment 3000 variable selling expenses 1.21 5844.3 net income 4534.8 answer to 6 no of units unit cost sales 4830 12 57960 variable cost 4830 9.23 44580.9 contribution margin 13379.1 rental of special equipment 3000 variable selling expenses 1.21 5844.3 2% selling commission 1159.2 4685.1 net income 5694 profit increased 1159.2
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