Exercise $6-6$B Special order decision

Avery Textile Company manufactures high$-$quality bed sheets and sells them in sets to a well$-$known re$-$

tail company for $$80$ a set. Avery has sufficient capacity to produce $150,000$ sets of sheets annually; the

retail company currently purchases $100,000$ sets each year. Avery's unit$-$level cost is $$45$ per set and its

fixed cost is $$1,050,000$ per year. A motel chain has offered to purchase $15,000$ sheet sets from Avery

for $$56\mathrm{.}25$ per set. If Avery accepts the order, the contract will prohibit the motel chain from reselling

the bed sheets.

Required

Should Avery accept or reject the special order? Support your answer with appropriate computations.