Question

Special Order Northern Company regularly sells its only product for $34 per unit and has a 25% profit on each sale. The company has accepted a special order for a number of units, the production of which would use part of its unused capacity. The special order sales price is 50% of the normal price, and the profit margin is only 60% of the regular dollar profit. What, apparently, is Note: Round answers to two decimal places, when applicable.

Answer 1

the question is incomplete, so I looked for similar questions and found the following requirements:

Round answers to two decimal places, when applicable.

a. Northern’s profit per unit on the special order?

$5.10

b. Northern’s variable cost per unit?

$11.90

c. Northern’s average fixed cost per unit on regular sales?

$13.60

Step-by-step explanation:

regular price $34

regular profit 25% x $34 = $8.50

special order price = $17

special order profit = $8.50 x 60% = $5.10

net profit = sales price - variable costs - fixed costs

$8.50 = $34 - variable costs - fixed costs

$5.10 = $17 - variable costs

variable costs = $25.50 - fixed costs

variable costs = $11.90

fixed costs = $13.60