Reference no: EM132742025

During the year, X Company sold 61,900 units of one of its products for $18.00 each. The following cost functions are for these regular production and sales levels:

Cost of goods sold: $6.14X + $129,371
Selling and administrative expenses: $2.38X + $73,661

Variable selling and administrative expenses include sales commissions equal to 2% of sales. At the end of the year, a company offered to buy 4,100 units but was only willing to pay $11.00 each. X Company had the capacity to produce the 4,100 units.

Problem 1: If X Company had accepted the special order, firm profits would have increased by

A: $8,998

B: $10,168

C: $11,490

D: $12,984

E: $14,671

F: $16,579

Problem 2: 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: $7,141

B: $8,070

C: $9,119

D: $10,304

E: $11,644

F: $13,158