Imperial Jewelers manufactures and sells a gold bracelet for $$400\mathrm{.}00.$ The company's accounting system says

the unit product cost for this bracelet is $$271\mathrm{.}00,$ as shown below:

A wedding party has approached Imperial Jewelers about buying $22$ gold bracelets for the discounted price of

$$360\mathrm{.}00$ each. The wedding party would like special filigree applied to the bracelets that would increase the

direct materials cost per bracelet by $$10.$ Imperial Jewelers would have to buy a special tool for $$457$ to apply

the filigree to the bracelets. The special tool would have no other use once the special order is completed.

To analyze this special order, Imperial Jewelers determined most of its manufacturing overhead is fixed and

unaffected by variations in how much jewelry is produced in any given period. However, $$11\mathrm{.}00$ of the overhead

is variable with respect to the number of bracelets produced. The company also believes accepting this order

would have no effect on its ability to produce and sell jewelry to other customers. Furthermore, the company

could fulfill the wedding party's order using existing manufacturing capacity.

Required:

What is the financial advantage $($disadvantage$)$ of accepting the wedding party's special order?

Should the company accept the special order?

Complete this question by entering your answers in the tabs below.

Required $1$

What is the financial advantage $($disadvantage$)$ of accepting the wedding party's special order?