Jolly Foods makes Jolly 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 factory overhead 0.30

Fixed factory overhead 0.50

Cost Co wants to purchase a generic brand peanut butter from Jolly and is willing to pay $1.50 per jar. The generic peanut butter will be made using a different recipe, lowering the direct materials cost to $0.80 per jar. Jolly can produce this special order using excess capacity; therefore, fixed costs will not increase. Use differential analysis to determine whether Jolly should accept this special order.

Please don't start from the point of view of profit