Kneller Co. manufactures and sells medals for winners of athletic and other events. Its manufacturing plant has the capacity to produce 22,000 medals each month; current monthly production is 10,000 medals. The company normally charges $86 per medal. Cost data for the current level of production are shown below:

Variable costs:Direct materials$416,900Direct labor$133,400Selling and administrative$21,600Fixed costs:Manufacturing$124,600Selling and administrative$68,200

The company has just received a special one-time order for 400 medals at $74 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?

multiple choice

• Accepted
• Not accepted