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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

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 105,600 units per year is:
Direct materials $ 1.60
Direct labor $ 2.00
Variable manufacturing overhead $ 0.60
Fixed manufacturing overhead $ 3.25
Variable selling and administrative expenses $ 1.30
Fixed selling and administrative expenses $ 1.00
The normal selling price is $22.00 per unit. The companys capacity is 123,600 units per year. An order has been received from a mail-order house for 1,500 units at a special price of $19.00 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 companys 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?

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