Please show work! X Company produces and sells 66,500 units of its regular produ
ID: 2392959 • Letter: P
Question
Please show work!
X Company produces and sells 66,500 units of its regular product each year for $15.00 each. The following cost information relates to this production Total $164,920 123,025 210,140 146,965 69,160 91,105 Per-Unit $2.48 1.85 3.16 2.21 1.04 1.37 Direct materials Direct labor (all variable Variable overhead Fixed overhend Variable selling Fixed selling A company has offered to buy 4,110 units for $11.82 each. Because the special order product is slightly different than the regular product, direct material variable costs will increase by $0.20 per unit, and some special equipment will have to be rented at a cost of $17,000. 8 pth Proft on the special order is 1. AO 3-1.300 ??$-3,479 cO $-2,905 DO 8-2,256 EO ss,151 FO$6,505 8 pl . Assume that if X Company accepts the special order, regular sales will fall by 1,100 units. Independent of # 1, the efect of the fall in regular sales will be to decrease company profit by 2 AO $5,694 BO $7,117 CO $8,896 DO $11,120EO $13,900 FO $17,375Explanation / Answer
1.A.$-4,300.
the following is the working:
2.B.$7,117.
working:
price per unit $11.82 less: direct materials (2.48+0.20) (2.68) direct labour (1.85) variable overhead (3.16) varible sselling (1.04) contribution 3.09 total contribution (3.09*4110) 12,700 less: fixed cost (special equipment) (17,000) profit on special order -4,300