Gotrack Company produces compasses for cross-country skiing. The production capacity is 45000 compasses and the company is currently operating at 85 per cent capacity. Variable manufacturing costs are $10 per unit. Fixed manufacturing costs are $425000. The compasses are normally sold directly to Outdoor Adventures at $25 each. Gotrack has an offer from On Top Company (a foreign wholesaler) to purchase an additional 5000 compasses at $13 per unit.

Required
(a) Calculate the available production capacity.
(b) Calculate the contribution margin per unit for both the current production of compasses and the special order compasses.
(c) Should the special order be accepted? Show calculations.
(d) What is the opportunity cost if On Top required 10000 compasses?
(e) Would you recommend the special order if On Top required 10000 compasses?