Business, 08.04.2021 16:50 aubreyfoster

Just before the year ended, a company offered to buy 4,120 units for $14.95 each. X Company had the capacity to produce the additional 4,120 units, but because the special order product was slightly different than the regular product, direct material costs were expected to increase to $2.40 per unit, and some special equipment would have to be rented for a total of $19,000. Sales $1,225,500
Cost of goods sold 521,805
Gross margin $703,695
Selling and administrative costs 153,510
Profit $550,185

Fixed cost of goods sold for the year was $130,935, and fixed selling and administrative costs were $72,885. The special order product has some unique features that will require additional material costs of $0.90 per unit and the rental of special equipment for $3,000. Assume the following fact: regular variable selling and administrative costs include sales commissions equal to 4% of sales, but there will be no sales commissions on the special order. This will cause the special order profit to increase by:

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Just before the year ended, a company offered to buy 4,120 units for $14.95 each. X Company had the...

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