Static Budget 100 Actual Results Number of units 110 $1,000 $1,100 Sales revenue Variable expenses Direct materials Direct labor Manufacturing overhead Total variable expenses 200 300 240 340 Contribution margin Fixed expenses Selling and administrative Manufacturing overhead Total fixed expenses 300 Net operating income $100 $50 Average Operating Assets $1.000 $1.000 Standards Direct Materials Direct Labor 1 pound per unit at $2 per pound 12 minutes per unit at $15 per hour Instructions 9 The Company is considering a special order from Dragon Industries. Dragon wants to purchase twenty units at a price of $6. The Company has the capacity to produce these units and the order will not interfere with existing production, however, the company would need to add a special engraving to the product which would add $1 of labor to each unit. Use the information in the Static Budget to make your decision Should the company accept or reject the special order? Please show all calculations