Questions 5 and 6 refer to the following problem: At the end of the year, a comp

Question

Questions 5 and 6 refer to the following problem:

At the end of the year, a company offered to buy 4,170 units of a product from X Company for a special price of $11.00 each instead of the company's regular price of $19.00 each. The following information relates to the 60,700 units of the product that X Company has already made and sold to its regular customers:

The special order product has some unique features that will require additional material costs of $0.87 per unit and the rental of special equipment for $2,500.

5. Profit on the special order would be

[ONLY TWO TRIES] 6. The marketing manager thinks that if X Company accepts the special order, regular customers will be lost, with demand falling by 950 units. The effect of this loss of sales will be to decrease firm profits by

Total   Per-Unit Revenue $1,153,300 $19.00    Cost of Goods Sold    Variable 353,881 5.83       Fixed 119,579 1.97    Selling and Administrative Costs    Variable   74,661   1.23       Fixed     64,949   1.07    Profit $540,230 $8.90   

Explanation / Answer

Questions 5 and 6 refer to the following problem: At the end of the year, a comp

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