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Kneller Co. manufactures and sells medals for winners of athletic and other events. Its manufacturing plant has the capacity to produce 12,000 medals each month;

Kneller Co. manufactures and sells medals for winners of athletic and other events. Its manufacturing plant has the capacity to produce 12,000 medals each month; current monthly production is 10,000 medals. The company normally charges $92 per medal. Cost data for the current level of production are shown below:

Variable costs:
Direct materials $ 446,000
Direct labor $ 142,700
Selling and administrative $ 23,100
Fixed costs:
Manufacturing $ 133,300
Selling and administrative $ 73,000

The company has just received a special one-time order for 400 medals at $76 each. For this particular order, no variable selling and administrative costs would be incurred. This order would also have no effect on fixed costs. Assume that direct labor is a variable cost.

Required:

Should the company accept this special order?

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