1. study the information given to determine whether Orlando Limited should accept the special order. Motivate your answer by calculating the differential profit or loss from accepting the offer

INFORMATION Orlando Limited sells soccer jerseys at R150 each. The company has excess capacity to produce 25% more than the current production. The costs associated with the current production and sales of 50 000 soccer jerseys are as follows: Variable manufacturing cost Fixed manufacturing cost Variable selling and administrative costs Fixed selling and administrative costs Total Total cost R3 500 000 R1 500 000 R750 000 R1 000 000 R6 750 000 Unit cost R70 R30 R15 R20 R135 Orlando Limited received an offer from a sports academy to purchase 10 000 soccer jerseys at R95 each. If Orlando Limited accepts the order it would not incur any additional selling and administrative costs, but it would have to pay a flat fee of R25 000 to the manufacturer's agent who obtains the special order