Co manufactures and sells medals for winners of athletic

Reference no: EM13608885

Biello Co. manufactures and sells medals for winners of athletic and other events. Its manufacturing plant has the capacity to produce 15,000 medals each month; current monthly production is 14,250 medals. The company normally charges $115 per medal. Cost data for the current level of production are shown below:

Variable costs:
Direct materials 969,000
Direct labor 270,750
Selling and administrative 27,075
Fixed Costs:
Manufacturing 350,550
Selling and administrative 89,775

The company has just received a special one-time order for 600 medals at $102 each. For this particular order, no variable selling and administrative costs would be incurred. This order would also have no effect on fixed costs.

Required: Should the company accept this special order? Why?

Reference no: EM13608885

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