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The James Company manufactures widgets that sell for $120 each. The company's unit cost for...

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Accounting

  1. The James Company manufactures widgets that sell for $120 each. The company's unit cost for each widget is as follows:

Direct Materials

$ 30

Direct Labor

$ 40

Variable Manufacturing Overhead

$ 10

Fixed Manufacturing Overhead

$ 20
=

Per Unit Cost

$ 100

A company in another state has offered to purchase 1,000 widgets from James Company at a cost of $90 each. If they were to accept this special order, no additional Fixed Manufacturing Overhead costs would be incurred. Should the James company accept this special order? Show relevant calculations.

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