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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 20,000 medals each month;
Kneller Co. manufactures and sells medals for winners of athletic and other events. Its manufacturing plant has the capacity to produce 20,000 medals each month; current monthly production is 10,000 medals. The company normally charges $112 per medal. Cost data for the current level of production are shown below: Variable costs: Direct materials Direct labor $542,900 $173,800 Selling and administrative $ 28,200 Fixed costs: Manufacturing Selling and administrative $162,700 $ 89,000 The company has just received a special one-time order for 500 medals at $94 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? Accepted O Not accepted
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