Questions 5 and 6 refer to the following information At the end of the year, a c
ID: 2574642 • Letter: Q
Question
Questions 5 and 6 refer to the following information At the end of the year, a company offered to buy 4,690 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 66,300 units of the product that X Company made and sold to its regular customers during the year: Per-Unit Total Cost of goods sold $7.61 $504,543 2.56 169,728 S10.17 $674,271 Period costs Total Fixed cost of goods sold for the year were $126,633, and fixed period costs were $72,267. variable period costs include selling commissions equal to 2% of revenue. 5. Profit on the special order is $17,963 ou are correct. Your receipt no. is 152-2822Previous Tries 6. Assume the following two changes for the special order: 1) variable cost of goods sold will increase by $0.90 per unit, and 2) there will be no selling commissions. What will be the effect of these two changes on the spacialL arder profitn Submit Answer Incorrect. Tries 2/5 Previous Tries ANSWER CANT BE: $14,7742 and $-3,189.20Explanation / Answer
6. Original variable cost per unit = $ ( 674,271 - 126,633 - 72,267) / 66,300 = $ 7.17.
Variable selling expense per unit = $ 19.00 x 2 % = $ 0.38.
Revised variable cost per unit = $ ( 7.17 + 0.90 - 0.38) = $ 7.69
Revised profit = $ ( 11.00 - 7.69) x 4,690 = $ 15,524
Effect on profit = $ ( 15,524 - 17,963) = - $ 2,439
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