B C 1 Question 1: Special Order (11 marks) 2 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 60,000 units per year is 3 4 5 Direct materials $ 5.10 6 Direct labor $ 3.80 7 Variable manufacturing overhead $ 1.00 8 Variable selling and administrative expense $ 1.50 Note 1 9 Fixed manufacturing overhead $ 4.20 10 Fixed selling and administrative expense $ 2.40 11 12 13 Delta has provided the following additional information 21.00 14 Selling price to regular customers 15 Maximum capacity in units 70,000 16 Current production level in units (normal activity level) 60,000 17 with the following details GO,000 16 Current production in units normally Level 17 TB Aspecial order has been received with the following details 19 Units in special order 20 Selling price to special order customer 21 22 Note 1: There will be no variable selling costs incurred for the special ordet. 23 15.000 $18.00 Management has asked you for your angstance in deciding whether or not the spodlat order should be accepted. 24 25 Required: 26 Calculate the following Special Order Customer 27 Regular Customer 28. a. variable cont per unit 29 b. Contribution marin perunt 30 estion 31 Using your answers to part a and b, calculate the following c. If the company decides to take on the special order, how many units will they 22 NOT be able to sell to their regular customers? d. Total Contribution margin earned from special order for the entire special 33 order) 34 e Opportunity cost any)- show as positive number 35 t increase (decrease) in operating income 37 g. Should the special order be accepted based on quantitative factors? 39 h. Why or why not? (1 mark) 40