Kirby Company manufactures leather briefcases sold to wholesalers for $$37\mathrm{.}95.$

The plant capacity for manufacturing this product is $750,000$ units annually, but normal volume is $500,000$ units. The unit and the total costs at normal volu $6-42$ Special order decision Kirby Company manufactures leather briefcases sold

to wholesalers for $$37\mathrm{.}95.$ The plant capacity for manufacturing this product

is $750,000$ units annually, but normal volume is $500,000$ units. The unit and

total costs at normal volume follow:

Manufacturing support and selling and administrative costs include both

variable and fixed costs; fixed manufacturing support costs for the current

year are budgeted at $$4,500,000,$ and fixed selling and administrative costs

are $$2,100,000.$

The company has been approached by a prospective customer who has

offered to purchase $100,000$ briefcases at $$25$ each. The customer wants the

product packaged in large cartons rather than the normal individual

containers and will pick them up in its own trucks. Accordingly, the variab

selling and administrative costs will be lower by $60\%$ for this order.

Required

Determine whether Kirby Company should accept this special order.me follow: