Read the scenario below, and address the subsequent requirements.

You are analyzing cost data for your boss related to a special order your company is considering from a large customer in Singapore. The following data are applicable to the product being ordered:

• Normal unit sales price: $49.95
• Variable unit manufacturing costs: $10.50
• Variable unit selling and administrative costs: $18.25

The customer is requesting that the sales order be accepted on the following terms:

1. The unit sales price equals the unit contribution margin plus 10%
2. Freight will be paid by the customer
3. Your company will pay a $5,000 "facilitating payment "to a "friend of the customer" to get the product through customs more quickly.

Your boss has told you this is a very important customer. Furthermore, this order will help some employees earn a little extra holiday money with overtime.

Required:

Post your responses to the following questions:

1. What are the accounting and ethical issues involved in this scenario?
2. Would you recommend the sales order be accepted on the sales terms proposed? Why or why not?