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 104,400 units per year is: Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead Variable selling and administrative expense Fixed selling and administrative expense $ 2.00 $ 4.00 $ 0.70 $ 5.05 $ 1.30 $ 3.00 ok + The normal selling price is $19.00 per unit. The company's capacity is 129,600 units per year. An order has been received from a mail- order house for 2,100 units at a special price of $16.00 per unit. This order would not affect regular sales or the company's total fixed costs. ces Required: 1.What would be the total financial impact of accepting the special order? (Indicate negative cash flows with a negative sign.) 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? (In other words, what is the least they can charge for these units and not lose money?) 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? Imperial Jewelers manufactures and sells a gold bracelet for $409.00. The company's accounting system says that the unit product cost for this bracelet is $257.00 as shown below: Direct materials Direct labor Manufacturing overhead Unit product cost $ 142 84 31 $ 257 The members of a wedding party have approached Imperial Jewelers about buying 17 of these gold bracelets for the discounted price of $369.00 each. The members of the wedding party would like special filigree applied to the bracelets that would increase the direct materials cost per bracelet by $9. Imperial Jewelers would also have to buy a special tool for $469 to apply the filigree to the bracelets. The special tool would have no other use once the special order is completed. To analyze this special order opportunity, Imperial Jewelers has determined that most of its manufacturing overhead is fixed and unaffected by variations in how much jewelry is produced in any given period. However, $10.00 of the overhead is variable with respect to the number of bracelets produced. The company also believes that accepting this order would have no effect on its ability to produce and sell jewelry to other customers. Furthermore, the company could fulfill the wedding party's order using its existing manufacturing capacity. Required: 1. What would be the total financial impact of accepting the special order from the wedding party? (Indicate negative cash flows with a negative sign.) 2. Should the company accept the special order? & Answer is complete but not entirely correct
