Questions 5 and 6 refer to the following information At the end of the year, a c

Question

Questions 5 and 6 refer to the following information At the end of the year, a company offered to buy 4,600 units of a product from X Company for a special price of $11.00 each instead of the company's regular price of $18.00 each. The following information relates to the 61,900 units of the product that X Company made and sold to its regular customers during the year: Cost of goods sold Period costs Total Per-Unit $8.56 2.56 Total $529,864 158,464 $688,328 $11.12 Fixed cost of goods sold for the year were $137,418, and fixed period costs were $70,566. Variable period costs include selling commissions equal to 4% of revenue. 5. Profit on the special order is Submit Answer Tries 0/5 6. Assume the following two changes for the special order: 1) variable cost of goods sold will decrease by $0.88 per unit, and 2) there will be no selling commissions. What will be the effect of these two changes on the special order profit? Submit Answer Tries 0/5

Explanation / Answer

Dear Student Thank you for using Chegg Please find below the answer and please give thumbs up   Statementshowing Computations Paticulars Q5 Sales = 4600*11          50,600.00 Less Variable Expenses Cost of goods sold = (529864 - 137418)/61900 * 4600          29,164.00 period cost = (158464 - 70566)/61900*4600            6,532.00 Total variable cost          35,696.00 Contribution Margin          14,904.00 Fixed cost :   Cost of goods sold                         -   period cost                         -   Total fixed cost                         -   Profit from special order          14,904.00 Paticulars Q6a Sales = 4600*11          50,600.00 Less Variable Expenses Cost of goods sold = (529864 - 137418)/61900 * 4600 - 4600*.88          25,116.00 period cost = (158464 - 70566)/61900*4600            6,532.00 Total variable cost          31,648.00 Contribution Margin          18,952.00 Fixed cost :   Cost of goods sold                         -   period cost                         -   Total fixed cost                         -   Profit from special order          18,952.00 Paticulars Q6b Sales = 4600*11          50,600.00 Less Variable Expenses Cost of goods sold = (529864 - 137418)/61900 * 4600 - 4600*11*4%          27,140.00 period cost = (158464 - 70566)/61900*4600            6,532.00 Total variable cost          33,672.00 Contribution Margin          16,928.00 Fixed cost :   Cost of goods sold                         -   period cost                         -   Total fixed cost                         -   Profit from special order          16,928.00

Related Questions

Navigate

• Browse (All)
• Browse Q
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.