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fashunluvr24 fashunluvr24
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A year ago

Kneller Corporation manufactures and sells medals for winners of athletic and other events. Its manufacturing plant has the capacity to produce 18,000 medals each month; current monthly production is 10,000 medals. The company normally charges $109 per medal. Cost data for the current level of production are shown below:

Variable costs:
Direct materials$ 528,400
Direct labor$ 169,100
Selling and administrative$ 27,400
Fixed costs:
Manufacturing$ 158,100
Selling and administrative$ 86,500

The company has just received a special one-time order for 500 medals at $94 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?

Textbook 
Introduction to Managerial Accounting: Brewer Edition: 9e

Introduction to Managerial Accounting: Brewer Edition: 9e


Edition: 9th
Authors:
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oth987oth987
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A year ago
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