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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

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 expenses
Fixed selling and administrative expenses
The normal selling price is $24.00 per unit. The company's capacity is 120,000 units per year. An order has been received from a mail-
order house for 1,300 units at a special price of $21.00 per unit. This order would not affect regular sales or the company's total fixed
costs.
Required:
What is the financial advantage (disadvantage) of accepting the special order?
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 the inferior units?
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