Kneller Co. manufactures and sells medals for winners in track and field and other events. Its manufacturing plant has the capacity to produce 23,000 medals each month; the current monthly production is 10,000 medals. The company normally charges $82 per medal. The cost data for the current level of production is shown below:

Variable costs:
Direct materials	ps	397,500
Direct labour	ps	127,200
sales and administrative	ps	20,600
Fixed costs:
Manufacturing	ps	118,800
sales and administrative	ps	65,000

The company just received a special one-time order of 400 medals at $63 each. For this particular order, no variable selling or administrative costs would be incurred. This order would also have no effect on fixed costs. Assume that direct labor is a variable cost.

Required:

Should the company accept this special request?Explain your reasoning.

Answer rating: 100% (QA)

To determine whether Kneller Co should accept the special onetime order we need to calculate the inc... View the full answer