(TCO 8) Bestick Company manufactures and sells trophies for winners of athletic events. The company normally

charges $65 per trophy. The average costs for a trophy is shown below.

Direct materials:                              $15

Direct labor:                                      10

Variable manufacturing overhead:     5

Variable marketing expenses:               3

Fixed manufacturing overhead:            12 ($1,200,000 fixed manufacturing overhead/100,000 trophies)

Total costs:                   $45

Bestick Company has enough idle capacity to accept a one-time only special order for 1,000 trophies at $55 per trophy. Bestick Company will not incur any variable marketing expenses for this order and no additional fixed costs.

Required:

Should the company accept this special order? Please state your decision and provide numerical support for your decision.

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