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  3. during the year, x company sold 62,800 units of on

During the year, X Company sold 62,800 units of one of its products for $19.00...

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Accounting

During the year, X Company sold 62,800 units of one of its products for $19.00 each. The following cost functions are for these regular production and sales levels:

  • Cost of goods sold: $6.16X + $138,160
  • Selling and administrative expenses: $2.64X + $65,312

Variable selling and administrative expenses include sales commissions equal to 3% of sales. At the end of the year, a company offered to buy 4,140 units but was only willing to pay $12.00 each. X Company had the capacity to produce the 4,140 units.

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

A: $9,137 B: $13,248 C: $19,210 D: $27,854 E: $40,388 F: $58,563

Now assume that there would not have been sales commissions for the special order. If X Company had accepted the special order, firm profits would have increased by

A: $10,817 B: $12,223 C: $13,812 D: $15,608 E: $17,637 F: $19,930

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