At the end of the year, a company offered to buy 4,590 units of a product from X
ID: 2575252 • Letter: A
Question
At the end of the year, a company offered to buy 4,590 units of a product from X Company for a special price of $11.00 each instead of the company's regular price of $17.00 each. The following information relates to the 61,000 units of the product that X Company made and sold to its regular customers during the year:
Fixed cost of goods sold for the year were $135,420, and fixed period costs were $64,050. Variable period costs include selling commissions equal to 4% of revenue.
5. Profit on the special order is
**The answer is not 5040.30, 20379.60, 17739.964 or 10695**
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?
**The answer is not 21800.664 or 22365**
Per-Unit Total Cost of goods sold $8.23 $502,030 Period costs 2.28 139,080 Total $10.51 $641,110Explanation / Answer
Dear Student Thank you for using Chegg Please find below the answer and please give thumbs up Statementshowing Computations Paticulars Q5 Sales = 4590*11 50,490.00 Less Variable Expenses Cost of goods sold = (502030 - 135420)/61000 * 4590 27,585.90 period cost = (139080 - 64050)/61000*4590 5,645.70 Total variable cost 33,231.60 Contribution Margin 17,258.40 Fixed cost : Cost of goods sold - period cost - Total fixed cost - Profit from special order 17,258.40 Paticulars Q6a Sales = 4590*11 50,490.00 Less Variable Expenses Cost of goods sold = (502030 - 135420)/61000 * 4590 - 4590*.73 - 4590*11*4% 22,215.60 period cost = (139080 - 64050)/61000*4590 5,645.70 Total variable cost 27,861.30 Contribution Margin 22,628.70 Fixed cost : Cost of goods sold - period cost - Total fixed cost - Profit from special order 22,628.70 Special order profit would increase by 5370.30 (22628.70 - 17258.40)
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