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Delta Company produces a single product. The cost of producing and selling a single unit of this product at the companys normal activity level of
Delta Company produces a single product. The cost of producing and selling a single unit of this product at the companys normal activity level of 96,000 units per year is: Direct materials $ 2.00 Direct labor $ 3.00 Variable manufacturing overhead $ 1.00 Fixed manufacturing overhead $ 3.65 Variable selling and administrative expenses $ 2.00 Fixed selling and administrative expenses $ 2.00 The normal selling price is $20.00 per unit. The companys capacity is 112,800 units per year. An order has been received from a mail-order house for 1,400 units at a special price of $17.00 per unit. This order would not affect regular sales or total fixed costs. Required: What is the financial advantage (disadvantage) of accepting the special order? As a separate
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