Palmer Company manufactures and sells trophies for winners of athletic events. The company normally charges $60 per trophy. The average costs for a trophy is shown below.

Direct materials$22

Direct labor12

Variable manufacturing overhead8

Variable marketing expenses4

Fixed manufacturing overhead16 ($2,000,000 fixed manufacturing overhead/125,000 trophies)

Total costs$62

Palmer Company has enough idle capacity to accept a one-time only special order for 10,000 trophies at $50 per trophy.Palmer Company will not incur any variable marketing expenses for this order and no additional fixed costs.

Required

Should the company accept this special order? Please state your decision and provide numerical support for your decision.