Biello Co. manufactures and sells medals for winners of athletic and other events. Its manufacturing plant has the capacity to produce 15,000 medals each month; current monthly production is 14,250 medals. The company normally charges $115 per medal. Cost data for the current level of production are shown below.
| Variable Costs Don't use plagiarized sources. Get Your Custom Essay on biello co manufactures and sells medals for winners of athletic and other events its 496254 For $10/Page 0nly | ||
| Direct Materials | $969,000 | |
| Direct Labor | $270,750 | |
| Selling and Administrative | $270,075 | |
| Fixed Costs | ||
| Manufacturing | $370,550 | |
| Selling and Administrative | $89,775 |
The company has just received a special one-time order for 600 medals at $102 each. For this particular order, no variable selling and administrative costs would be incurred. This order would also have no effect on fixed costs.
Required:
Should the company accept this special order? Why?
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