During the year, X Company produced and sold 64,500 units of one of its products....
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Accounting
During the year, X Company produced and sold 64,500 units of one of its products. The following is the related revenue and cost information:
Revenue
$1,096,500
Cost of goods sold
518,580
Selling and administrative costs
240,585
Profit
$337,335
Total variable cost of goods sold were $401,835, and total variable selling and administrative costs were $171,570.
At the end of the year, a company offered to buy 4,030 units but was only willing to pay $12.00 each.
Q: If X Company had accepted the special order, firm profits would have increased by
A: $5,961
B: $8,644
C: $12,533
D: $18,173
E: $26,351
F: $38,209
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Q: There is concern that regular customers will find out about the special order, and in order to retain all of the X Company's regular customers, the regular selling price would have to be reduced by $0.30. If the selling price were reduced and next year's unit sales turn out to be the same as this year's sales, firm profits would fall by
A: $19,350
B: $24,188
C: $30,234
D: $37,793
E: $47,241
F: $59,052
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