1 Fruitcan Limited manufactures and sells a peach can which the company sells at 25p per can. Currently output is 150,000 cans per month, which represent 75% of production capacity. The company has an opportunity to use the spare capacity by producing the product for a supermarket which will sell it under their own brand. The supermarket is willing to pay 18p per can. The details of the costs per peach can is shown below: Costs per can pence Direct material 5 Direct labour 5 Variable overheads 4 Fixed overheads 6 Note: fixed overheads are apportioned on the basis of current output You are required to: a) Prepare a monthly income statement showing current profits and the expected profits from the new proposal. b) Using this data, advise the management of Fruitcan Limited as to whether the supermarkets offer should be accepted