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Questions 5, 6, and 7 refer to the following information The following cost functions apply to X Company's regular production and sales during the year: Cost of goods sold: $5.65 (X) $120,540 Selling and administrative expenses: $1.15 (X) + $77,490 where X is the number of units produced and sold. During the year, X Company sold 61,500 units for $18.00 each. At the end of the year, a company offered to buy 4,340 units but was only willing to pay $12.00 each. X Company had the capacity to produce the additional 4,340 units. 5. If X Company had accepted the special order, firm profits would have increased by Submit Answer Tries 0/3 6. Consider the following three changes. Direct material costs on the special order would have increased by $0.90 per unit, direct labor costs on the special order would have decreased by $0.37 per unit, and X Company would have had to rent special equipment for $1,500. Independent of your answer to (5), the effect of these changes would have been to reduce profit on the special order by Submit Answer Tries 0/3 7. In order to retain all of X Company's regular customers, it would have had to reduce the regular selling price by $0.50. If the selling price were reduced and next year's unit sales turned out to be the same as this year's sales, firm profits would have fallen by Submit Answer Tries 0/3

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