The marketing manager thinks that if x company accepts the

Reference no: EM13567419

At the end of the year, a company offered to buy 4,420 regular units from X Company for a special price of $12.77 each. The following information is for the year during which the company had sold 66,500 units to its regular customers:

	Total	Per-Unit
Revenue	$1,117,200	$16.80
Cost of goods sold	573,230	8.62
Selling and administrative costs	177,555	2.67
Profit	$366,415	$5.51

Total fixed cost of goods sold were $148,960, and total fixed selling and administrative costs were $84,455.

a. Profit on the special order is

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b. Now assume that if the special order is accepted, three things will happen: 1) direct material costs will increase by $0.86 per unit, 2) special equipment will have to be rented for $4,000, 3) sales commissions, regularly $0.51 per unit, will not be paid. These changes will cause the special order profit that you computed in #5 to decrease by

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c. The marketing manager thinks that if X Company accepts the special order, regular customers will be lost, and demand will fall by 500 units. This would decrease firm profits by

Reference no: EM13567419

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