Imperlal Jewelers manufactures and sells a gold bracelet for $400.00. The company's accounting system says that the unit product cost for this bracelet is $266.00 as shown below: The members of a wedding party have approached Imperlal Jewelers about buying 20 of these gold bracelets for the discounted price of $360.00 each. The members of the wedding party would like special fillgree applied to the bracelets that would increase the direct materlals cost per bracelet by $12. Imperial Jewelers would also have to buy a special tool for $453 to apply the filligree to the bracelets. The special tool would have no other use once the special order is completed. Direct materials $ 146
Direct labor 81
Manufacturing overhead 39
Unit product cost $ 226
To analyze this special order opportunity, Imperial Jewelers has determined that most of Its manufacturing overhead is fixed and unaffected by varlations in how much jewelry is produced in any given perlod. However, $13.00 of the overhead is varlable with respect to the number of bracelets produced. The company also belleves that 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 its existing manufacturing capacity. Required: 1. What is the financlal advantage (disadvantage) of accepting the speclal order from the wedding party? 2. Should the company accept the special order?