Incremental Analysis: Special Order Armstrong Co. manufactures and sells medals for winners of athletic and other events. Its manufacturing plant has the capacity to produce 15,000 medals each month; current monthly production is 12,750 medals. The company normally charges $120 per medal. Cost data for the current level of production are shown below: Variable costs: Direct materials Direct labor Selling and administrative $624,750 $306,000 $15,300 Fixed costs Manufacturing Selling and administrative $506,175 $123,675 The company has just received a special one-time order for 700 medals at $83 each. For this particular order, no variable selling and administrative costs would be incurred. This order would also have no effect on fixed costs. Required: a. Should the company accept this special order? Why? b. In making this decision what other factors should the company consider? Sell or process further Kraft, Inc. produces milk at a total cost of $66,000. The production generates 60,00 which can be sold for $1 per gallon to a pasteurizat further into ice cream and then sold for $2.50 per gallon. It costs $75,000 more to turn the annual milk supply into ice cream. 0 gallons of milk ion company, or the milk can be processed Instructions If Kr aft processes the milk into ice cream, how much is the incremental profit or loss? Should Kraft process the milk into ice cream or sell it as is? 4