At the end of the year, a company offered to buy 4,000 units of a product from X

Question

At the end of the year, a company offered to buy 4,000 units of a product from X Company for a special price of $11.00 each instead of the company's regular price of $19.00 each. The following information relates to the 64,600 units of the product that X Company made and sold to its regular customers during the year: Cost of goods sold Period costs Total Per-Unit $8.41 2.53 $10.94 Total $543,286 163,438 $706,724 Fixed cost of goods sold for the year were $140,182, and fixed period costs were $96,900. Variable period costs include selling commissions equal to 2% of revenue. 5. Profit on the special order is Submit Answer Tries 0/5 6. Assume the following two changes for the special order: 1) variable cost of goods sold will decrease by $0.73 per unit, and 2) there will be no selling commissions. What will be the effect of these two changes on the special order profit? Submit Answer Tries 0/5

Explanation / Answer

Dear Student Thank you for using Chegg Please find below the answer and please give thumbs up   Statementshowing Computations Paticulars Q5 Sales = 4000*11          44,000.00 Less Variable Expenses Cost of goods sold = (543286 - 140182)/64600 * 4000          24,960.00 period cost = (163438 - 96900)/64600*4000            4,120.00 Total variable cost          29,080.00 Contribution Margin          14,920.00 Fixed cost :   Cost of goods sold                         -   period cost                         -   Total fixed cost                         -   Profit from special order          14,920.00 Paticulars Q6a Sales = 4000*11          44,000.00 Less Variable Expenses Cost of goods sold = (543286 - 140182)/64600 * 4000 - 4000*.73          22,040.00 period cost = (163438 - 96900)/64600*4000            4,120.00 Total variable cost          26,160.00 Contribution Margin          17,840.00 Fixed cost :   Cost of goods sold                         -   period cost                         -   Total fixed cost                         -   Profit from special order          17,840.00 Sales = 4000*11          44,000.00 Less Variable Expenses Cost of goods sold = (543286 - 140182)/64600 * 4000 - 4000*11*2%          24,080.00 period cost = (163438 - 96900)/64600*4000            4,120.00 Total variable cost          28,200.00 Contribution Margin          15,800.00 Fixed cost :   Cost of goods sold                         -   period cost                         -   Total fixed cost                         -   Profit from special order          15,800.00

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