Reference no: EM132605961

Glade Company produces a single product. The cost of producing and selling one unit at the current activity level of 8,000 units per month is as follows:

Direct materials $2.50

Direct labour $3.00

Variable manufacturing overhead $0.50

Fixed manufacturing overhead $4.25

Variable selling and administrative expenses $1.50

Fixed selling and administrative expenses $2.00

The normal selling price is $16 per unit and the monthly capacity is 10,000 units. An order has been received from an overseas customer for 1,500 units at a price of $12 per unit. No additional costs will be incurred to meet this order.

Question 1: Should this order be accepted?