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katieleex0x katieleex0x
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A year ago

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.

Required:

Should the company accept this special order? Why?

Textbook 
Introduction to Managerial Accounting: Brewer Edition: 9e

Introduction to Managerial Accounting: Brewer Edition: 9e


Edition: 9th
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bhturnerbhturner
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A year ago
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katieleex0x Author
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