Imperial Jewelers manufactures and sells a gold bracelet for $$405\mathrm{.}00.$ The company's accounting system says the unit product cost for

this bracelet is $$264\mathrm{.}00,$ as shown below:

A wedding party has approached Imperial Jewelers about buying $23$ gold bracelets for the discounted price of $$365\mathrm{.}00$ each. The

wedding party would like special filigree applied to the bracelets that would increase the direct materials cost per bracelet by $$9.$

Imperial Jewelers would have to buy a special tool for $$469$ to apply the filigree to the bracelets. The special tool would have no other

use once the special order is completed.

To analyze this special order, Imperial Jewelers determined most of its manufacturing overhead is fixed and unaffected by variations in

how much jewelry is produced in any given period. However, $$10\mathrm{.}00$ of the overhead is variable with respect to the number of

bracelets produced. The company also believes accepting this order would have no effect on its ability to produce and sell jewelry to

other customers. Furthermore, the company could fulfill the wedding party's order using existing manufacturing capacity.

Required:

What is the financial advantage $($disadvantage$)$ of accepting the wedding party's special order?

Should the company accept the special order?

Answer is complete but not entirely correct.

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