Imperial Jewelers manufactures and sells a gold bracelet for $407.00. The companys accounting system says that the unit product cost for this bracelet is $264.00 as shown below: Direct materials $ 143 Direct labor 82 Manufacturing overhead 39 Unit product cost $ 264 The members of a wedding party have approached Imperial Jewelers about buying 25 of these gold bracelets for the discounted price of $367.00 each. The members of the wedding party would like special filigree applied to the bracelets that would increase the direct materials cost per bracelet by $9. Imperial Jewelers would also have to buy a special tool for $450 to apply the filigree to the bracelets. The special tool would have no effect on its ability to produce and sell jewelry to other customers. Furthermore, the company could fulfill the wedding partys order using its existing manufacturing capacity.

Required:

1. What is the financial advantage (disadvantage) of accepting the special order from the wedding party?

2. Should the company accept the special order?