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Kneller Company manufactures and sells medals for winners of athletic and other events. Its manufacturing plant has the capacity to produce 17,000 medals each month;

Kneller Company manufactures and sells medals for winners of athletic and other events. Its manufacturing plant has the capacity to produce 17,000 medals each month; current monthly production is 10,000 medals. The company normally charges $97 per medal. Cost data for the current level of production are shown below:

Variable costs:
Direct materials $ 470,200
Direct labor $ 150,500
Selling and administrative $ 24,400
Fixed costs:
Manufacturing $ 140,800
Selling and administrative $ 77,000

The company has just received a special one-time order for 400 medals at $84 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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