The Penguin Company makes a single product, sweaters. The company has the capacity to produce 45,000 sweaters per year. Per-unit costs to produce and sell one sweater at that activity level follow:

Direct Materials

$20

Direct Labour

$10

Variable Manufacturing Overhead

$5

Fixed Manufacturing Overhead

$7

Variable Selling Expense

$8

Fixed Selling Expense

$2

The regular selling price for one sweater is $70. A special order has been received at Penguin Company from the Cat Company to purchase 8,000 sweaters next year at 20% off the regular selling price. If this special order is accepted, the variable selling expense will be reduced by 30%. However, Penguin would have to purchase a specialized machine to engrave the Cat Company name on each sweater in the special order. This machine would cost $23,200, and Penguin would have no use for it after the special order was filled. The total fixed costs, both manufacturing and selling, are constant within the relevant range of 30,000 to 50,000 sweaters per year.

Required:

If Penguin Company can expect to sell 32,000 sweaters next year through regular channels, should the special order be accepted?