Morrison Company has a request for a special order of $20$ Christmas Wreaths from a local vendor.

The normal selling price is $$300$ and its unit product cost is $$174,$ as show below:

Direct Materials $$89$

Direct Labor $$66$

Manufacturing Overhead $$19$

Total Unit Product Cost $$174$

Most of the manufacturing overhead is fixed and unaffected by variations in how many Christmas

Wreaths are produced in a given period. However, $$9$ of the overhead is variable, depending on the

number of wreaths made. The customer would like a special bow tied to the wreath requiring additional

materials costing $$7$ per wreath and would also require a special tool costing $$205$ that would have no

other use once the special order was completed. This order would have no effect on the company$$s

regular sales, and the order could be filled using the company$$s existing capacity without affecting any

other order.

Required:

What effect would accepting this order have on the company$$s operating income if a special price of

$$250$ is offered per wreath for this order? Should the special order be accepted at this price?