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Anglen Company manufactures and sells trophies for winners of athletic and other events. Its ...

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Anglen Company manufactures and sells trophies for winners of athletic and other events. Its ...

Anglen Company 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 14,400 trophies. The company normally charges $103 per trophy. Cost data for the current level of production are shown below:

Variable costs:
Direct materials	$ 460,800
Direct labor	$ 316,800
Selling and administrative	$ 15,840
Fixed costs:
Manufacturing	$ 404,640
Selling and administrative	$ 74,880

The company has just received a special one-time order for 900 trophies at $48 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.

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Should the company accept this special order? Why?

Textbook

Introduction to Managerial Accounting: Brewer Edition: 9e

Edition: 9^th

Authors: Brewer, Garrison, Noreen

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