X Company sells 64,700 units of its regular product each year. A company has offered to buy 4,270 units for $11.98 each. The following total revenue and cost information relates to X Company's regular production and sales:

Revenue $905,800
Costs:
Direct materials $126,812
Direct labor 95,109
Variable overhead 163,691
Fixed overhead 146,222
Variable selling 82,169
Fixed selling 89,286
Because the special order product is slightly different than the regular product, X Company will incur $10,000 in special setup costs and $15,000 to rent some unique equipment.

#1. Profit on the special order is _________________


#2. Assume that if X Company accepts the special order, it will have to lower the selling price on each of its regular units by $0.59. Independent of #1, the effect of lowering the selling price will be to decrease profit by _____

Answer rating: 100% (QA)

1 Profit on the special order Special order units 427... View the full answer