Gooding Foods makes Goody-Goody brand peanut butter. The cost to make each jar is $2.05 and consists of the following:

Direct Materials $1.00

Direct Labor $0.25

Variable Overhead 0.30

Fixed overhead 0.50

A grocery store chain wants to puchase a generic brand peanut butter from Gooding and is willing to pay $1.05 per jar. The generic peanut butter will be made using a different recipe, lowering the direct materials cost to $0.80 per jar. Gooding can produce this special order using excess capacity; therefore fixed costs will not increase. Use differential analysis to determine whether Gooding should accept this special order.