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Title: Kneller Company manufactures and sells medals for winners of athletic and other events. Its ...
Post by: BigFella9503 on Jul 17, 2023

Kneller Company manufactures and sells medals for winners of athletic and other events. Its manufacturing plant has the capacity to produce 12,000 medals each month; current monthly production is 9,600 medals. The company normally charges $99 per medal. Cost data for the current level of production are shown below:

Variable costs:
Direct materials$ 480,000
Direct labor$ 153,600
Selling and administrative$ 24,960
Fixed costs:
Manufacturing$ 144,000
Selling and administrative$ 78,720

The company has just received a special one-time order for 500 medals at $89 each. For this particular order, no variable selling and 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 order? Why?



Title: Re: Kneller Company manufactures and sells medals for winners of athletic and other events. Its ...
Post by: Marinaanderson0 on Jul 17, 2023
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