Chapter 12 Question 1

Chapter 12 Homework problems a 5M!!! Help Save at Exit Submit 5 palms 9304* Print References M 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 92,400 units per year is: Direct materials $ 1 .60 Direct labor 5 4 . 00 Variable manufacturing overhead $ 1.00 Fixed manufacturing overhead 5 4 .55 Variable selling and adninistrative expenses $ 1 . 20 Fixed selling and administrative expenses 5 3 .00 The normal selling price is $22.00 per unit. The company's capacity is 120,000 units per year. An order has been received from a mail-order house for 2,300 units at a special price of $19.00 per unit. This order would not affect regular sales or the company's total xed costs. Required: 1. What is the nancial 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 effect on the sales of its current model. What unit cost is relevant for establishing a minimum selling price for these units? 5 points Complete this question by entering your answers in the tabs below. eBook Required 1 Required 2 Print References What is the financial advantage (disadvantage) of accepting the special order? McComplete this question by entering your answers in the tabs below. ts Book Required 1 Required 2 Print 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 ferences to have any effect on the sales of its current model. What unit cost is relevant for establishing a minimum selling price for these units? (Round your answer to 2 decimal places.) Show less A Relevant cost per unit