Reference no: EM133011774

Hadley Company has received a special order for Product R3P at a selling price of $20 per unit. This order is over and above normal production, and budgeted production and sales targets for the year have already been exceeded. Capacity exists to satisfy the special order. No selling costs will be incurred in connection with this order.

Unit cost to manufacture and sell Product R3P are as follows:

direct materials, $7.60;

direct labor $3.75;

variable manufacturing overhead, $9.25;

fixed manufacturing costs, $4.85;

variable selling costs, $2.75; and

fixed general and administrative costs, $6.75.

Problem 1: Should Hadley Company accept the order?