Solution-Calculate the profit on the special order

Calculate the profit on the special order

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Reference no: EM131730871

Question - At the end of the year, a company offered to buy 4,450 units of a product from X Company for a special price of $12.00 each Instead of the company's regular price of $17.00 each. The following information relates to the 65,000 units of the product that X Company made and sold to its regular customers during the year:

	Per-Unit	Total
Cost of goods sold	$8.80	$572,000
Period costs	2.80	182,000
Total	$11.60	$754,000

Fixed cost of goods sold for the year were $133,250, and fixed period costs were $91,650. Variable period costs include selling commissions equal to 2% of revenue.

Required -

1. Profit on the special order is.

2. Assume the following two changes for the special order: 1) variable cost of goods sold will decrease by $0.90 per unit, and 2) there will be no selling commissions. What will be the effect of these two changes on the special order profit?

Reference no: EM131730871

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Calculate the profit on the special order

Reference no: EM131730871

Reference no: EM131730871

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