Homework Answers
Answer 1:
If the order is accepted, the profit will increase by $ 24,750.40
Calculation:
| Revenue | $ 59,520.00 |
| Cost of goods sold | $ 29,412.80 |
| Administrative expenses | $ 5,356.80 |
| Net Income | $24,750.40 |
Answer 2:
If the order is accepted, the profit will reduce by $ 6,257.60
Calculation:
| Additional material & labor | $ 5,257.60 |
| Rental cost | $ 1,000.00 |
| Total | $ 6,257.60 |
Answer 3:
If the order is accepted, the profit will reduce by $ 22,140.
Calculation:
| Contribution lost (18 - 17.64 * 61,500) | $ 22,140.00 |
In case of any doubt, please comment.
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$18.00 each. Total costs were as follows:
Cost of goods sold
Variable
$425,095
Fixed
145,376
Selling and administrative
Variable
$86,966
Fixed
79,827
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product but only for $12.00 each. X Company had the capacity to
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produce the additional units, and even though there would have been
no additional selling and administrative costs, it rejected the
offer.
5. If X Company had accepted the special order, firm profits would
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