At the end of the year, a company offered to buy 4,890 units of a product from X

Question

At the end of the year, a company offered to buy 4,890 units of a product from X Company for $12.00 each instead of the company's regular price of $18.00 each. The following functional income statement is for the 66,500 units of the product that X Company has already made and sold to its regular customers:

Fixed cost of goods sold for the year was $130,340, and fixed selling and administrative costs were $97,090. The special order product has some unique features that will require additional material costs of $0.71 per unit and the rental of special equipment for $4,500.

Profit on the special order would be What?

35109 is not the answer..

Sales $1,197,000    Cost of goods sold    569,240    Gross margin $627,760    Selling and administrative costs      195,510    Profit $432,250   

Explanation / Answer

Profit On special order

Particulars Amount Sales revenue (4890*12) 58680 Less: Cost of goods sold {(569240-130340)/66500*4890} 32274 Less: Selling exp {(195510-97090)/66500*4890} 72372 Less: Special raw material (4890*0.71) 3471.90 Less: Rent of special equipment 4500 loss 53937.90

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