22 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 103,200 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 $21.00 per unit. The company's capacity is 124,800 units per year. An order has been received from a mail- order house for 1,800 units at a special price of $18.00 per unit. This order would not affect regular sales or total fixed costs. Required: 1. What is the financial advantage (disadvantage) of accepting the special order? 2. 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? $1.90 $4.00 $0.90 $ 3.25 $1.20 $ 3.00 Complete this question by entering your answers in the tabs below. Required 1 Required 2 What is the financial advantage (disadvantage) of accepting the special order? Required 1 Required 2 > variable swing an austrative expenses Fixed selling and administrative expenses The normal selling price is $21.00 per unit. The company's capacity is 124,800 units per year. An order has been received from a mail- order house for 1,800 units at a special price of $18.00 per unit. This order would not affect regular sales or total fixed costs. >1.00 $3.00 Required: 1. What is the financial advantage (disadvantage) of accepting the special order? 2. 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. Required 1 Required 2 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? Note: Round your answer to 2 decimal places. Relevant cost per unit < Required 1 Required 2 > Show less A

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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22
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 103,200 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 $21.00 per unit. The company's capacity is 124,800 units per year. An order has been received from a mail-
order house for 1,800 units at a special price of $18.00 per unit. This order would not affect regular sales or total fixed costs.
Required:
1. What is the financial advantage (disadvantage) of accepting the special order?
2. 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?
$1.90
$4.00
$0.90
$ 3.25
$1.20
$ 3.00
Complete this question by entering your answers in the tabs below.
Required 1
Required 2
What is the financial advantage (disadvantage) of accepting the special order?
Required 1
Required 2 >
Transcribed Image Text:22 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 103,200 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 $21.00 per unit. The company's capacity is 124,800 units per year. An order has been received from a mail- order house for 1,800 units at a special price of $18.00 per unit. This order would not affect regular sales or total fixed costs. Required: 1. What is the financial advantage (disadvantage) of accepting the special order? 2. 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? $1.90 $4.00 $0.90 $ 3.25 $1.20 $ 3.00 Complete this question by entering your answers in the tabs below. Required 1 Required 2 What is the financial advantage (disadvantage) of accepting the special order? Required 1 Required 2 >
variable swing an austrative expenses
Fixed selling and administrative expenses
The normal selling price is $21.00 per unit. The company's capacity is 124,800 units per year. An order has been received from a mail-
order house for 1,800 units at a special price of $18.00 per unit. This order would not affect regular sales or total fixed costs.
>1.00
$3.00
Required:
1. What is the financial advantage (disadvantage) of accepting the special order?
2. 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.
Required 1 Required 2
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?
Note: Round your answer to 2 decimal places.
Relevant cost per unit
< Required 1
Required 2 >
Show less A
Transcribed Image Text:variable swing an austrative expenses Fixed selling and administrative expenses The normal selling price is $21.00 per unit. The company's capacity is 124,800 units per year. An order has been received from a mail- order house for 1,800 units at a special price of $18.00 per unit. This order would not affect regular sales or total fixed costs. >1.00 $3.00 Required: 1. What is the financial advantage (disadvantage) of accepting the special order? 2. 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. Required 1 Required 2 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? Note: Round your answer to 2 decimal places. Relevant cost per unit < Required 1 Required 2 > Show less A
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