Hinds Ltd, as part of its product range, produces the ‘SILVTO’. This product normally sells for £160. The following costs are associated with its production:

The directors have recently received a request from a Latvian company offering to purchase 2,000 SILVTOs at a price of £140 each. Advise them as to whether they should accept or reject the Latvian offer.

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Direct materials Direct labour Variable overheads Fixed costs Cost per unit 34 75 12 25