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Exercise 11-9 special order Decision t 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 102,000 units per year is Direct sateria1s Direct labor Variable manufacturing overhead Pixed sanafacturing overhead Variable selling and administrative expenses $ 1.80 3.00 0-50 s 5.25 1.30 2.00 Pixed nelling and adninistrative expenees The normal selling price is $20.00 per unit. The company's capacity is 128.400 units per year. An order has been receved from a mail order house for 2.200 units at a special price of $1700 per unitg This order would not affect regular sales or the company's total fixed 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 of this product that were produced last year and that are inferlor to the current model. The units must be sold through regular channels at reduced prices. What unit cost is relevant for establishing a minimum selling price for these units? Answer is complete but not entirely correct. Prex 3 of Next Quiz 6 Form A.docKFile1pat 2 3

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