Question 3

ABC Company makes computers. The company is producing and selling 6,000 computers per month (the maximum capacity is producing 8,000 computers per month). ABC is selling the computer for $6,000. Costing information as follows: - Total $4,800,000 per month for direct materials - $2,000 per unit for direct labor - $700 per unit for other manufacturing costs - Fixed overhead costs of $1,000 are allocated to each computer. ABC has received a special order for 2,000 computers at $4,000 each.

Should ABC accept the special order? Support your answer with appropriate computations.