Walton Company manufactures a personal computer designed for use in schools and markets it under its own label. Walton has the capacity to produce 35,000 units a year but is currently producing and selling only 11,000 units a year. The computers normal selling price is $1,630 per unit with no volume discounts. The unit-level costs of the computers production are $440 for direct materials, $210 for direct labor, and $120 for indirect unit-level manufacturing costs. The total product- and facility-level costs incurred by Walton during the year are expected to be $2,290,000 and $815,000, respectively. Assume that Walton receives a special order to produce and sell 3,140 computers at $1,280 each.

Required

Calculate the contribution to profit from the special order. Should Walton accept or reject the special order?

Walton Company manufactures a personal computer designed for use in schools and markets it under its own label. Walton has the capacity to produce 35,000 units a year but is currently producing and selling only 11,000 units a year. The computer's normal selling price is $1,630 per unit with no volume discounts. The unit-level costs of the computer's production are $440 for direct materials, $210 for direct labor, and $120 for indirect unit-level manufacturing costs. The total product- and facility-level costs incurred by Walton during the year are expected to be $2,290,000 and $815,000, respectively. Assume that Walton receives a special order to produce and sell 3,140 computers at $1,280 each. Required Calculate the contribution to profit from the special order. Should Walton accept or reject the special order