2. Special Order

Dainty Diamonds manufactures and sells a gold necklace for $199.85. The company's accounting system indicates the unit product cost for this necklace is $150 as shown below:

Direct Materials $ 85.00

Direct Labor $ 45.00

Manufacturing Overhead $ 20.00

Unit product cost $150.00

A couple planning their wedding have approached Dainty Diamonds about buying 25 of these gold necklaces for a discounted price of $165 each. The couple wants a small modification made to the necklaces, specifically they want the clasp style to be different. This modification would result in the direct materials cost of the necklace to be $3 higher. And to make the modification to the necklaces, a special tool will be needed that will cost the jeweler $200. This tool will not be used by the jeweler after the special order is complete.

Should the jeweler accept the special order? Show your work, explain each step of your work, and explain the rational for your response to the question.