Exerclse $13\mathrm{.}9($Static$)$ Special Order Decision $[$L$013\mathrm{.}4]$

Delta Company produces a single product. The cost of producing and selling a single unlt of this product at the company's normal

activity level of $60,000$ units per year ls:

The normal selling price is $$21$ per unit. The company's capacity is $75,000$ units per year. An order has been recelved from a mall$-$order

house for $15,000$ units at a special price of $$14\mathrm{.}00$ per unit. This order would not affect regular sales or total fixed costs.

Required:

What is the financlal advantage $($dsadvantage$)$ of accepting the special order?

As a separate matter from the special order, assume the company's inventory includes $1,000$ units that are inferlor quality. The units

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

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

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

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