5.2 TCO D) 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 $141 per trophy. Cost data for the current level of production are shown below:
Variable costs:
Direct materialsAc€¦..$ 948,600
Direct laborAc€¦Ac€¦.$ 290,700
Selling and administrative,Ac€¦.$ 41,310
Fixed coasts:
Manufacturing Ac€¦Ac€¦$579,870
Selling and administrativeAc€¦. $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