Question Assignment description
Delta Firm produces a single product. The price of producing and promoting a single unit of this product on the firm’s regular exercise degree of 96,00zero models per 12 months is: Direct supplies$2.20 Direct labor$2.00 Variable manufacturing overhead$.80 Mounted manufacturing overhead$four.05 Variable promoting and administrative bills$1.40 Mounted promoting and administrative bills$1.00 The conventional promoting value is $22 per unit. The corporate’s capability is 124,800 models per 12 months. An order has been acquired from a mail-order home for two,400 models at a special value of $19.00 per unit. This order wouldn’t have an effect on common gross sales.Required:1.If the order is accepted, by how a lot will annual income be elevated or decreased? (The order is not going to change the corporate’s complete fastened prices.) 2.Assume the corporate has 500 models of this product left over from final 12 months which might be inferior to the present mannequin. The models should be bought by way of common channels at diminished costs. What unit value is related for establishing a minimal promoting value for these models? (Spherical your reply to 2 decimal locations.)
