Reference no: EM132763569

During the year, X Company sold 65,400 units of one of its products for $17.00 each. The following cost functions are for these regular production and sales levels:

• Cost of goods sold: $6.03X + $134,070
• Selling and administrative expenses: $3.15X + $81,096Variable selling and administrative expenses include sales commissions equal to 4% of sales. At the end of the year, a company offered to buy 4,380 units but was only willing to pay $12.00 each. X Company had the capacity to produce the 4,380 units.

Problem 1: Now assume that there would not have been sales commissions for the special order. If X Company had accepted the special order, firm profits would have increased by

A: $6,992

B: $8,181

C: $9,572

D: $11,199

E: $13,103

F: $15,330