Question

can you help me with those please

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 92 400 units per year is points $ 3.60 Skipped Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead Variable selling and administrative expenses Fixed selling and administrative expenses B The normal selling price is $20.00 per unit. The company's capacity is 110,400 units per year. An order has been received from a mail order house for 1,500 units at a special price of $1700 per unit. This order would not affect regular sales or the company's total foed 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 of this product that were produced last year and that are inferior to the current model The units must be sold through regular channels at reduced prices. The company does not expect the selling of these inferior units to have any effect on the sales of its current model What unit cost is relevant for establishing a minimum selling price for these units? Complete this question by entering your answers in the tabs below. Required Required 2 What is the financial advantage (disadvantage of accepting the special order? Required 2 >

Answer 1

Answer 1
First Question , need to determined " What is the financial Advantage ( Disadvantage) of accepting this Special Order
	Rate$/Unit
Direct Material	2.10
Direct Labour	3.00
Variable Manufacturing OH	0.7
Variable Selling & Admin OH	1.5
Total Cost - Operation	7.30	B
Selling price	17	A
( sepcial order received)
Contributon	9.70	(A-B)
Number of Unit	1500
Additional Contribution from received of 1500 Unit = $ 14,550 (1500 unit *$9.70/ unit)

Answer 2
In second question also asked same Question - Advantage /Disadvantage of project acceptance
Dacks Present Net profit Position as below
	Amnt$	Amnt$/ Unit
Unit = 87000
Selling price $ 58 / unit
Sales Value 87000*$58/Unit		58
Less
Varaiable cost
Direct material	9.5
Direct Labour	9
Variable Manufacturing OH	2
Variable Selling Expenses	4.7
Total variable cost		25
Contribution		33
Number of unit =87000
Contribution in $ term	28,53,600	A	(87000*$33)
Less Fixed cost
ManufaCtiring OH	6,09,000	B
Selling Expenses	2,61,000	C
Net Profit	19,83,600	(A-B-C)
At Output of 87000 Unit , company generated Net profit $ 1983600
Noe as per Question , there are some incremental effect on revenue growth by
25% ., so Output increased by 87000*125%= 108750Unit
As per above date ,
Contribution $/ unit	33
Number of unit =108750
Contribution in $ term -A	35,67,000	(108750*$33)
Less
Fixed ManufaCtiring OH-B	6,09,000
Fixed Selling Expenses-C	3,61,000
( $261000+$100000
Net Profit (A-B-C)	25,97,000	D
Less
Net profit as per present situation ( as above)	19,83,600	D1
Incremental Net profit	6,13,400	(D-D1)
So final answer would be PROJECT Accepted with above Incremental Benefit