Manning co. manufactures and sells trophies for winners of athletic

Manning Co. manufactures and sells trophies for winners of athletic and other events. Its manufacturing plant has the capacity to produce 18,000 trophies each month; current monthly production is 15,300 trophies. The company normally charges $141 per trophy. Cost data for the current level of production are shown below.

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Variable Costs

Direct Materials                                   $948,600

Direct Labor                            $290,700

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Selling and Administrative       $41,300

 

Fixed Costs

Manufacturing                         $579,870

Selling and Administrative       $134,640


The company has just received a special one-time order for 900 trophies at $73 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? (Points : 15)

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