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 of 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?

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Complete this question by entering your answers in the tabs below:

Required 1:
What is the financial advantage (disadvantage) of accepting the special order?

Financial advantage:
$ _______

---

Required 2:
What unit cost is relevant for establishing a minimum selling price for the inferior units?

Question

28-07-2024
Business

Answered

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 of 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:
What is the financial advantage (disadvantage) of accepting the special order?

Financial advantage:
$ _______

---

Required 2:
What unit cost is relevant for establishing a minimum selling price for the inferior units?

Answer :

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GinnyAnswer GinnyAnswer · Answer 1 · 2024-07-28T23:20:26-04:00

Final answer:

The financial advantage of accepting the special order is [tex]$1,000. The relevant unit cost for establishing a minimum selling price for the inferior units is the variable cost per unit.

Explanation:

Financial Advantage: The financial advantage of accepting the special order is $[/tex]1,000.

Relevant unit cost: When establishing a minimum selling price for inferior units, the relevant unit cost would be the variable cost per unit, as fixed costs remain constant and should be covered by regular sales.

Learn more about Special order and relevant unit cost here:

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