This topic is regarding SPECIAL ORDERS in managerial accounting.

Question: Should the company accept this special order?

Given:

Company manufactures medals for winners of athletic events and other contests. Its manufacturing plant has the capacity to produce 11,000 medals each month. Current production and sales are 10,000 medals per month. The company normally charges $150 per medal. Cost information for the current activity level is as follows:

Variable costs that vary with number of units produced
Direct Materials	$350,000
Direct Manufcaturing Labor	$375,000
Variable costs (for setups, material, quality control, etc.) that vary with number of batches, 200 batches X $500 per batch
Fixed Manufacturing Costs	$300,000
Fixed Marketing Costs	$275,000
Total Costs	$1,400,000

The company has just received a special one-time-only order for 1,000 medals at $100 per medal. Accepting the special order would not affect the companys regular business. The company makes medals for its existing customers in batch sizes of 50 medals (200 batches 50 medals per batch = 10,000 medals). The special order requires the company to make the medals in 25 batches of 40 medals.

Question: Should the company accept this special order? Please show work.