HomeworkLib
Question

Last year, X Company sold 66,100 units of its only product for $18.00 each. Total costs...

Last year, X Company sold 66,100 units of its only product for $18.00 each. Total costs were as follows:

Cost of goods sold
   Variable $442,209
   Fixed 120,302
Selling and administrative
   Variable $78,659
   Fixed 66,100


At the end of the year, a company offered to buy 4,100 units of the product but only for $12.00 each. X Company had the capacity to 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 have increased by

6. X Company's production manager thought that the special order units might have required additional direct material and direct labor costs per unit of $0.77 and $0.29, respectively, and the rental of special equipment for $1,000. The combined effect of these changes would have been to reduce the special order profit by

7. X Company's marketing manager felt that in order for regular sales to continue at 66,100 units this year, the company would have had to reduce the regular selling price this year to $17.52. The result of this price reduction would have been to reduce X Company's profits this year by

business   accounting   
0 0
Add a comment Improve this question Transcribed image text
Next > < Previous
Sort answers by oldest

Homework Answers

Answer #1

5)

S.P per unit 18.00
Variable COGS (442209/66100) 6.69
Variable Selling & Distribution (78659/66100) 1.19
Contribution Per unit 10.12
Since the X company had the capacity to produce 4100 units but did not accept the order,
it will result in loss of = 12 - 6.69 - 1.19 = 4.12 per unit
In total the contribution lost for not accepting the order will be(4.12*4100) 16892
Hence if X company had accepted the special order firms profits would have increased by $16892

6)

Increase in cost per unit = 0.77 + 0.29 = 1.06

Total increase in cost = (4100*1.06) + 1000 = 5346

Hence the combined effect of the changes will reduce the special order profit by $5346

7)

Earlier contribution per unit = 10.12

Revised contribution per unit = 17.52 - 6.69 - 1.19 = 9.64

Hence, the result of this price reduction would have been to reduce X Company's profits this year by

(10.12 - 9.64)*66100 units = $31728

0 0
Add a comment
Know the answer?
Add Answer to:
Last year, X Company sold 66,100 units of its only product for $18.00 each. Total costs...
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for? Ask your own homework help question. Our experts will answer your question WITHIN MINUTES for Free.
Similar Homework Help Questions

  • Last year, X Company sold 64,900 units of its only product for $18.00 each. Total costs...

    Last year, X Company sold 64,900 units of its only product for $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 At the end of the year, a company offered to buy 4,170 units of the product but only for $12.00 each. X Company had the capacity to produce the additional units, and even though there would have been no additional selling and administrative costs, it rejected...

  • Last year, X Company sold 62,500 units of its only product for $18.00 each. Total costs...

    Last year, X Company sold 62,500 units of its only product for $18.00 each. Total costs were as follows: Cost of goods sold    Variable $443,125    Fixed 130,000 Selling and administrative    Variable $90,000    Fixed 65,625 At the end of the year, a company offered to buy 4,680 units of the product but only for $11.00 each. X Company had the capacity to produce the additional units, and even though there would have been no additional selling and administrative costs, it rejected...

  • Last year, X Company sold 68,000 units of its only product for $18.00 each. Total costs...

    Last year, X Company sold 68,000 units of its only product for $18.00 each. Total costs were as follows: Cost of goods sold Variable $407,320 Fixed 127,160 Selling and administrative Variable $96,560 Fixed 101,320 At the end of the year, a company offered to buy 4,710 units of the product but only for $12.00 each. X Company had the capacity to produce the additional units, and even though there would have been no additional selling and administrative costs, it rejected...

  • Last year, X Company sold 69,400 units of its only product for $18.00 each. Total costs...

    Last year, X Company sold 69,400 units of its only product for $18.00 each. Total costs were as follows: Cost of goods sold Variable $450,406 Fixed 126,308 Selling and administrative Variable $72,870 Fixed 71,482 At the end of the year, a company offered to buy 4,430 units of the product but only for $12.00 each. X Company had the capacity to produce the additional units, and even though there would have been no additional selling and administrative costs, it rejected...

  • Last year, X Company sold 64,300 units of its only product for $18.00 each. Total costs...

    Last year, X Company sold 64,300 units of its only product for $18.00 each. Total costs were as follows: Cost of goods sold Variable $412,806 Fixed 145,961 Selling and administrative Variable $84,876 Fixed 67,515 At the end of the year, a company offered to buy 4,870 units of the product but only for $12.00 each. X Company had the capacity to produce the additional units, and even though there would have been no additional selling and administrative costs, it rejected...

  • Last year, X Company sold 69,200 units of its only product for $17.00 each. Total costs...

    Last year, X Company sold 69,200 units of its only product for $17.00 each. Total costs were as follows: Cost of goods sold Variable $424,196 Fixed 131,480 Selling and administrative Variable $76,120 Fixed 96,188 At the end of the year, a company offered to buy 4,090 units of the product but only for $11.00 each. X Company had the capacity to produce the additional units, and even though there would have been no additional selling and administrative costs, it rejected...

  • Last year, X Company sold 64,200 units of its only product for $18.00 each. Total costs...

    Last year, X Company sold 64,200 units of its only product for $18.00 each. Total costs were as follows: Cost of goods sold Variable $483,426 Fixed 131,610 Selling and administrative Variable $70,620 Fixed 92,448 At the end of the year, a company offered to buy 4,500 units of the product but only for $11.00 each. X Company had the capacity to produce the additional units, and even though there would have been no additional selling and administrative costs, it rejected...

  • Last year, X Company sold 66,000 units of its only product for $18.00 each. Total costs were as follows: Cost of good...

    Last year, X Company sold 66,000 units of its only product for $18.00 each. Total costs were as follows: Cost of goods sold    Variable $415,800    Fixed 121,440 Selling and administrative    Variable $94,380    Fixed 78,540 At the end of the year, a company offered to buy 4,730 units of the product but only for $11.00 each. X Company had the capacity to produce the additional units, and even though there would have been no additional selling and administrative costs, it rejected...

  • Last year, X Company sold 67,800 units of its only product for $18.00 each. Total costs were as follows: Cost of good...

    Last year, X Company sold 67,800 units of its only product for $18.00 each. Total costs were as follows: Cost of goods sold    Variable $397,308    Fixed 126,108 Selling and administrative    Variable $73,902    Fixed 94,242 At the end of the year, a company offered to buy 4,660 units of the product but only for $12.00 each. X Company had the capacity to produce the additional units, and even though there would have been no additional selling and administrative costs, it rejected...

  • Last year, X Company sold 64,300 units of its only product for $18.00 each. Total costs were as follows: Cost of go...

    Last year, X Company sold 64,300 units of its only product for $18.00 each. Total costs were as follows: Cost of goods sold Variable $412,806 Fixed 145,961 Selling and administrative Variable $84,876 Fixed 67,515 At the end of the year, a company offered to buy 4,870 units of the product but only for $12.00 each. X Company had the capacity to produce the additional units, and even though there would have been no additional selling and administrative costs, it rejected...

ADVERTISEMENT
Free Homework Help App
Download From Google Play
Scan Your Homework
to Get Instant Free Answers
Need Online Homework Help?
Ask a Question
Get Answers For Free
Most questions answered within 3 hours.
ADVERTISEMENT
ADVERTISEMENT