Please answer ALL of the questions! At the end of the year, a company offered to...

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Accounting

Please answer ALL of the questions!

At the end of the year, a company offered to buy 4,100 units ofa product from X Company for a special price of $12.00 each insteadof the company's regular price of $18.00 each. The followinginformation relates to the 68,400 units of the product that XCompany made and sold to its regular customers during theyear:

Per-UnitTotal     
Cost of goods sold$9.43   $645,012   
Period costs2.60   177,840   
Total$12.03   $822,852   


Fixed cost of goods sold for the year were $151,848, and fixedperiod costs were $78,660. Variable period costs include sellingcommissions equal to 4% of revenue.

6. Profit on the special order is

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7. Assume the following two changes for the special order: 1)variable cost of goods sold will decrease by $0.87 per unit, and 2)there will be no selling commissions. What would be the effect ofthese two changes on the special order profit?

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8. There is concern that regular customers will find out about thespecial order, and X Company's regular sales will fall by 700units. As a result of these lost sales, X Company's profits wouldfall by

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Answer & Explanation Solved by verified expert
3.8 Ratings (376 Votes)
6 Profit on the special order is Total cost of goods sold 645012 Less Fixed Cost 151848 Variable cost of goods sold 493164 Variable cost of goods sold per unit 721 Total Selling and Administrative 177840 Less Fixed Cost 78660    See Answer
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