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Alpha Custom Metals (ACM) manufactures and sells medals for winners of sporting events. Its manufacturing plant has the capacity to produce 12,000 medals each month;
Alpha Custom Metals (ACM) manufactures and sells medals for winners of sporting events. Its manufacturing plant has the capacity to produce 12,000 medals each month; current monthly production is 10,000 medals. The company normally charges $89 per medal. Cost data for the current level of production are shown below: Variable Costs: Direct Materials $431,400 Direct Labour $138,100 Selling & Admin $22,400 Fixed Costs: Manufacturing $129,200 Selling & Admin $70,700 The company has just received a special one-time order for 400 medals at $70 each. For this particular order, no variable selling and administrative costs would be incurred. This order would also have no effect on fixed costs. Assume that direct labor is a variable cost. re a Required: Should ACM accept this special order? Explain. Please show your work
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