Exercise $6-7$A $($Algo$)$ Special order decision LO $6-2$

Zachary Company manufactures a personal computer designed for use in schools and markets it under its own label. Zachary has the capacity to produce $26,000$ units a year but is currently producing and selling only $12,000$ units a year. The computer's normal selling price is $$1,680$ per unit with no volume discounts. The unit$-$level costs of the computer's production are $$590$ for direct materials, $$130$ for direct labor, and $$200$ for indirect unit$-$level manufacturing costs. The total product$-$ and facility$-$level costs incurred by Zachary during the year are expected to be $$2,160,000$ and $$808,000,$ respectively. Assume that Zachary receives a special order to produce and sell $3,130$ computers at $$1,210$ each.

Required

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

Contribution to profit

Should Zachary accept or reject the special order?