Near the end of 2020, X Company had produced and sold 62,000 units of its only...

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Near the end of 2020, X Company had produced and sold 62,000 units of its only product. Costs for these units were: Total Per-Unit Direct materials $105,400 $1.70 Direct labor 86,800 1.40 Variable overhead 173,600 2.80 Fixed overhead 111,600 1.80 Variable selling and administration 76,260 1.23 Fixed selling and administration 93,000 1.50 Total $646,660 $10.43 Just before the year ended, a company offered to buy 4,790 units for $12.87 each. X Company had the capacity to produce the additional 4,790 units, but because the special order product was slightly different than the regular product, direct material costs were expected to increase by $0.10 per unit, and some special equipment would have to be rented for a total of $16,000. 4. What would profit have been on the special order? Submit Answer Tries 0/5 5. Assume that if X Company had accepted the special order, it would have had to lower the selling price of its regular product to prevent the loss of regular customers. The price of its regular product is normally set at 20% above total manufacturing cost per unit, but it would have to reduce it to $8.84 per unit. The effect of lowering the selling price would have been to decrease company profits by Near the end of 2020, X Company had produced and sold 62,000 units of its only product. Costs for these units were: Total Per-Unit Direct materials $105,400 $1.70 Direct labor 86,800 1.40 Variable overhead 173,600 2.80 Fixed overhead 111,600 1.80 Variable selling and administration 76,260 1.23 Fixed selling and administration 93,000 1.50 Total $646,660 $10.43 Just before the year ended, a company offered to buy 4,790 units for $12.87 each. X Company had the capacity to produce the additional 4,790 units, but because the special order product was slightly different than the regular product, direct material costs were expected to increase by $0.10 per unit, and some special equipment would have to be rented for a total of $16,000. 4. What would profit have been on the special order? Submit Answer Tries 0/5 5. Assume that if X Company had accepted the special order, it would have had to lower the selling price of its regular product to prevent the loss of regular customers. The price of its regular product is normally set at 20% above total manufacturing cost per unit, but it would have to reduce it to $8.84 per unit. The effect of lowering the selling price would have been to decrease company profits by

Answer rating: 100% (QA)

1 Calculation of profit on special order Sales 61647 47901287 Less Direct Material Cost 8... View the full answer