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Question - At the end of the year, a company offered to buy 4,340 units of a product from X Company for a special price of $12.00 each instead of the company's regular price of $18.00 each. The following information relates to the 60,500 units of the product that X Company made and sold to its regular customers during the year:
Per-Unit
Total
Cost of goods sold
$7.84
$474,320
Period costs
2.77
167,585
$10.61
$641,905
Fixed cost of goods sold for the year were $111,925, and fixed period costs were $79,255. Variable period costs include selling commissions equal to 2% of revenue.
Required -
1. Profit on the special order is?
2. Assume the following two changes for the special order: 1) variable cost of goods sold will decrease by $0.83 per unit, and 2) there will be no selling commissions. What will be the effect of these two changes on the special order profit?
Attachment:- Assignment.png
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