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 $88,800$ units per year is:

The normal selling price is $$25\mathrm{.}00$ per unit. The company's capacity is $120,000$ units per year. An order has been received from a mail$-$

order house for $2,600$ units at a special price of $$22\mathrm{.}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 matter from the special order, assume the company's inventory includes $1,000$ units that are inferior quality. The units

must be sold through regular channels at a reduced price. The company does not expect the selling of these inferior units to affect

regular sales. What unit cost is relevant for establishing a minimum selling price for the inferior units?

Complete this question by entering your answers in the tabs below.

What is the financial advantage $($disadvantage$)$ of accepting the special order?