Acc505 Managerial Accounting: (TCO D) Manning Co. manufactures and sells trophies for winners
Acc505 Managerial Accounting Week 6
(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 Materials $948,600 Direct Labor $290,700 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?