Kneller 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 10,000 medals. The company normally charges $96 per medal. Cost data for the current level of production are shown below:

Variable costs:

Direct materials $465,400

Direct labor$148,900

Selling and administrative$24,100

Fixed costs:

Manufacturing$139,000

Selling and administrative$76,000

The company has just received a special one-time order for 500 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. Assume that direct labor is a variable cost.

Required:

Should the company accept this special order?

• Accepted
• Not accepted