What will be the effect of these two changes

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Question - At the end of the year, a company offered to buy 4,750 units of a product from it 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 65,300 units of the product that X Company made and sold to its regular customers during the year:

 

Per-Unit

Total

Cost of goods sold

$9.09

$593,577

Period Costs

2.35

153,455

Total

$11.44

$747,032

Fixed cost of goods sold for the year were $141,045, and fixed period costs were $69,218. Variable period costs include selling commissions equal to 2% of revenue.

Required -

Profit on the special order is?

Assume the following two changes for the special order: 1] variable cost of goods sold will decrease by $0.76 per unit, and 2) there will be no selling commissions. What will be the effect of these two changes on the special order profit?

Reference no: EM131733636

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