You are analyzing cost data for your boss related to a special order your company is considering from a large customer in Singapore. The following data are applicable to the product being ordered: Normal unit sales price: $49.95 Variable unit manufacturing costs: $10.50 Variable unit selling and administrative costs: $18.25 The customer is requesting that the sales order be accepted on the following terms: The unit sales price equals the unit contribution margin plus 10% Freight will be paid by the customer Your company will pay a $5,000 "facilitating payment "to a "friend of the customer" to get the product through customs more quickly. Your boss has told you this is a very important customer. Furthermore, this order will help some employees earn a little extra holiday money with overtime.

Since client is demanding to keep commitment at certain level, it wont be advantageous for the organization since organization wont gain same measure of $ 21200 as commitment in such circumstance when it needs to pay $ 5000 extra for the custom discharge despite the fact that selling costs would be eliminated and figures would be this way:

Sales = 23320

Variable Costs = 10500

Variable Selling Exp = 0

Contribution = 12820

Part 1: Accounting issues:

This would present bookkeeping dilemma to report deals at not exactly the value charges to different clients
There would be accounted for misfortune if request acknowledged

Moral issues:

Different clients would feel off-base as we would be caring a lot more significant expense to them
Representatives may likewise be snorted in light of the fact that additional time charges may not make up for the time went through with the family