At the end of the year, a company offered to buy 4,090 units of a product from X

Q: At the end of the year, a company offered to buy 4,090 units of a product from X

5) Variable Cost of goods sold per unit = (583751-138929)/62300 = 7.14 Variable period costs = (159488-84105)/62300 = 1.21 Total variable cost for special order = (7.14+1.21)*4090 = 34151.50 Total sales price received for special order = 12*4090 = 49080 Profit on special order = 49080 - 34151.50 = 14928.50

ID: 2575300 • Letter: A

Question

At the end of the year, a company offered to buy 4,090 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 62,300 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 $138,929, and fixed period costs were $84,105. Variable period costs include selling commissions equal to 2% of revenue.

5. Profit on the special order is?

Per-Unit Total Cost of goods sold $9.37 $583,751 Period costs 2.56 159,488 Total $11.93 $743,239

Explanation / Answer

Variable Cost of goods sold per unit = (583751-138929)/62300 = 7.14

Variable period costs = (159488-84105)/62300 = 1.21

Total variable cost for special order = (7.14+1.21)*4090 = 34151.50

Total sales price received for special order = 12*4090 = 49080

Profit on special order = 49080 - 34151.50 = 14928.50

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At the end of the year, a company offered to buy 4,090 units of a product from X

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