Anglen Company manufactures and sells trophies for winners of athletic and other events. Its manufacturing plant has the capacity to
produce trophies each month; current monthly production is trophies. The company normally charges $ per
trophy. Cost data for the current level of production are shown below:
Variable costs:
Direct materials $
Direct labor $
Selling and administrative $
Fixed costs:
Manufacturing $
Selling and administrative $
The company has just received a special onetime order for trophies at $ 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?
Answer is not complete.
