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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 15.000 medals each month
Kneller Company manufactures and sells medals for winners of athletic and other events. Its manufacturing plant has the capacity to produce 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 ordet no variable selling and administrative costs would be incurred. This order would also have no effect on foxed costs. Assume that direct labor is a variable cost Required: Should the company accept this special order? Accepted Not accepted
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