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