90.2K

Verified Solution

Link Copied!

Questions b, b, and I war X Company sold 67.600 units of its only product for $18.00 each. Total costs were as follows: Cost of goods sold Variable 5460,636 Fixed 147,368 Selling and administrative Variable 91,936 Fixed 99,372 At the end of the year, a company offered to buy 4,560 units of the product but only for $11.00 each. X Company had the capacity to produce the additional units, and even though there would have been no additional selling and administrative costs, it rejected the offer 8 pts. Ir X Company had accepted the special order, firm profits would have increased by 5. AO $5,813 BO 87,266 CO 89,082 DO $11,353 EO $14,191 FO $17,738 8pc 16 X Company's production manager thought that the special order units might have required additional direct material and direct labor costs per unit of $0.88 and 80.27, respectively, and the rental of special equipment for $2,000. The combines effect of these changes would have been to reduce the special order profit by 6. AO $5,673 BO $6,411 CO 87,244 DO $8,186 EO 89,250 FO $10,452 8 pt 7. X Company's marketing manager felt that in order for regular sales to continue at 67,600 units this year, the compa would have had to reduce the regular selling price this year to $17.52. The result of this price reduction would have been reduce X Company's profits this year by 7. AO 87,340 BO $10,643 CO $15,433 DO $22,378 EO $32,448 FO $47,050 8pt The following income statement is for X Company and its only two products - A and B: Total Product A Product B Sales $183,490 $89,560 $93,930 Variable Costs 100,832 51.049 49,783 Contribution margin $82.658 $38.511 $44,147 Fixed costs: Avoidable 61,820 23,610 38,210 Unavoidable 31.330 6,080 25,250 Profit $-10,492 $8,821 $-19,313 ecause Product B is showing a loss, X Company is considering dropping it and saving its avoidable fixed costs. If it roduct B, X Company's new profits will be A 8-8,767 B 8-10,258 CO 8-12,002 DO S-14,042 EO 8-16,429 FO $-19,222

Answer & Explanation Solved by verified expert

See Answer