1.Walston Company produces kitchen cabinets for homebuilders across the Western United States.The cost of producing 5,000 cabinets is as follows:

Materials$500,000

Labor250,000

Variable overhead100,000

Fixed overhead400,000

Total$1,250,000

Walston also incurs selling expenses of $20 per cabinet.Wellington Corp. has offered Walston $165 per cabinet for a special order of 1,000 cabinets.The cabinets would be sold to homebuilders in the Eastern United States and thus would not conflict with Walston's current sales.Selling expenses per cabinet for this special order would only be $5 per cabinet.Watson has available capacity to do the work.

Relevant cost per unit as computed by the Walston's accountant would be as follows:

Materials ($500,000/5,000)$100

Labor(250,000/5,000)50

Variable Overhead (100,000/5,000)20

Selling expenses5

Total relevant cost per unit$175

Should Walston accept the special order?Why or why not?What could be a reason that a special order will not be accepted"