Toronto Company makes one spare part that it sells to a manufacturer who then assemble and finish the product. The company has the capacity to make 5,000 units of it; however, its current production volume is only 3,500 units. The costs to make a unit are: $300 for unit-level materials, $200 for unit-level labor, $ 10 for unit- level supplies and $150 for an allocation of facility-level overhead. The normal selling price for a unit of the spare part is $1,000. The company has recently received a special order for 1000 units at a price of $700 each.

Required:

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

Answer: