7. A customer has asked Mudfog Orphanage where Oliver Twist worked to supply 5,500 pounds of gruel with some modifications, for $39.50 per pound. The normal selling price per pound is $50.90 each. The normal unit cost of the gruel is computed as follows: Direct Materials $12.70 Direct Labor 6.10 Variable Manufacturing Cost 8.70 Fixed Manufacturing Costs 7.70 Fixed Sales and Administrative Cost 5.10 $40.30 The special order would have an insignificant effect on Mudfog's total fixed manufacturing overhead and sales and administrative costs. The customer would like some additional ingredients added to the gruel that would increase the variable costs by $3.35 per pound and that would require a one-time investment of $32,750 in special gruel cooking molds that would have no salvage value. This special order would have no effect on the orphanage's other sales. Mudfog Orphanage has ample spare capacity for producing the special order. Required: Should Mudfog do the deal? If so, why (i.e. show your work!)