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  3. 99. during the year, x company produced and sold 6

99. During the year, X Company produced and sold 69,800 units of one of its...

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Accounting

99.

During the year, X Company produced and sold 69,800 units of one of its products. The following is the related revenue and cost information:

Revenue $1,326,200
Cost of goods sold 607,260
Selling and administrative costs 260,354
Profit $458,586

Total variable cost of goods sold were $459,284, and total variable selling and administrative costs were $174,500.

At the end of the year, a company offered to buy 5,000 units but was only willing to pay $11.00 each.

A. If X Company had accepted the special order, firm profits would have increased by

A: $3,146 B: $3,932 C: $4,915 D: $6,144 E: $7,680 F: $9,600

B. There is concern that regular customers will find out about the special order, and in order to retain all of the X Company's regular customers, the regular selling price would have to be reduced by $0.43. If the selling price were reduced and next year's unit sales turn out to be the same as this year's sales, firm profits would fall by

A: $23,505 B: $26,561 C: $30,014 D: $33,916 E: $38,325 F: $43,307

In case you need:

image

TTable 1: Present Value of $1.00 Table 2: Present Value of an Annuity of $1.00

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