Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

4 Delta Company produces a single product. The cost of producing and selling a single unit of this product at the company's normal activity level

image text in transcribedimage text in transcribed

4 Delta Company produces a single product. The cost of producing and selling a single unit of this product at the company's normal activity level of 98,400 units per year is: o points Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead Variable selling and administrative expense Fixed selling and administrative expense $ 1.70 $ 3.00 $ 0.50 $ 4.95 $ 1.60 $ 2.00 The normal selling price is $26.00 per unit. The company's capacity is 116,400 units per year. An order has been received from a mail- order house for 1,500 units at a special price of $23.00 per unit. This order would not affect regular sales or the company's total fixed costs. Required: 1. What is the financial advantage (disadvantage) of accepting the special order? 2. As a separate matter from the special order, assume the company's inventory includes 1,000 units of this product that were produced last year and that are inferior to the current model. The units must be sold through regular channels at reduced prices. The company does not expect the selling of these inferior units to have any affect on the sales of its current model. What unit cost is relevant for establishing a minimum selling price for the inferior units? Answer is complete but not entirely correct. Complete this question by entering your answers in the tabs below. Required 1 Required 2 What is the financial advantage (disadvantage) of accepting the special order? Financial advantage $ 23,920 X 4 Delta Company produces a single product. The cost of producing and selling a single unit of this product at the company's normal activity level of 98,400 units per year is: 10 points Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead Variable selling and administrative expense Fixed selling and administrative expense $ 1.70 $ 3.00 $ 0.50 $ 4.95 $ 1.60 $ 2.00 The normal selling price is $26.00 per unit. The company's capacity is 116,400 units per year. An order has been received from a mail- order house for 1,500 units at a special price of $23.00 per unit. This order would not affect regular sales or the company's total fixed costs. Required: 1. What is the financial advantage (disadvantage) of accepting the special order? 2. As a separate matter from the special order, assume the company's inventory includes 1,000 units of this product that were produced last year and that are inferior to the current model. The units must be sold through regular channels at reduced prices. The company does not expect the selling of these inferior units to have any affect on the sales of its current model. What unit cost is relevant for establishing a minimum selling price for the inferior units? Answer is complete but not entirely correct. Complete this question by entering your answers in the tabs below. Required 1 Required 2 As a separate matter from the special order, assume the company's inventory includes 1,000 units of this product that were produced last year and that are inferior to the current model. The units must be sold through regular channels at reduced prices. The company does not expect the selling of these inferior units to have any affect on the sales of its current model. What unit cost is relevant for establishing a minimum selling price for the inferior units? (Round your answer to 2 decimal places.) Show less Relevant cost per unit 1.30 X

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Value Added Auditing CERM Academy Series On Enterprise Risk Management

Authors: Greg Hutchins

4th Edition

978-0965466554

More Books

Students also viewed these Accounting questions

Question

2. What potential barriers would you encourage Samuel to avoid?

Answered: 1 week ago