Question

Biello Co. manufactures and sells medals

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 beincurred. This order would also have no effect on fixed costs.

Required:

Should the company accept this special order? Why?
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