Please just find me the profit for #5 Questions 5 and 6 refer to the following p
ID: 2463406 • Letter: P
Question
Please just find me the profit for #5
Questions 5 and 6 refer to the following problem:
At the end of the year, a company offered to buy 4,430 units of a product from X Company for $11.00 each instead of the company's regular price of $17.00 each. The following functional income statement is for the 64,200 units of the product that X Company has already made and sold to its regular customers:
Sales $1,091,400
Cost of goods sold 554,046
Gross margin $537,354
Selling and administrative costs 153,438
Profit $383,916
Fixed cost of goods sold for the year was $130,326, and fixed selling and administrative costs were $69,336. The special order product has some unique features that will require additional material costs of $0.85 per unit and the rental of special equipment for $4,500.
5. Profit on the special order would be__________________________________________ Submit Answer Tries 0/3
6. Assume the following fact: regular variable selling and administrative costs include sales commissions equal to 4% of sales, but there will be no sales commissions on the special order. This will cause the special order profit to increase by
Explanation / Answer
Profit on special order:
Particulars Amount Sales revenue (4430*11) 48730 Less: Variable Cost of goods sold {(554046-130326)/64200*4430} 29238 Less: Variable Selling and admn exp {(153438-69336)/64200*4430} 58033 Less: special cost (4430*0.85) 3765.50 Less:special equipment rent 4500 loss 46806.50