1 The Slade Company is an electronics company having eight (8) product lines. Income data for one of the products for the year just ended is as follows: N'000 N'000 Sales - 200,000 units @ average price of N100 20,000 Variable costs: Direct materials @ N35 7,000 Direct labour @ N10 2,000 Variable factory overhead @ N5 1,000 Sales commission (15% of selling price) 3,000 Other variable costs @ N5 1.000 Total variable costs @ N70 14,000 6,000 3,000 2,000 5,000 1,000 Contribution Fixed costs: Discretionary Committed Operating income Additional information: a) The electronics industry had severe competition throughout the year. Near the end of the year, Albany Co. Ltd which was experimenting with various components in its regular product line, offered N80 each for 3,000 units. The latter would have been in addition to the 200,000 units actually sold. Acceptance of this special order by The Slade Company would not affect regular sales. b) The Salesman hoped that the order might provide entrance into a new application so he told the Product Manager, that he would accept half his regular commission rate if the order is accepted. c) The Product Manager is afraid of the precedent that might be set by cutting the price as Albany Co. Ltd may come to expect a selling price that is below normal. Besides, the proposed N80 is less than the full cost of the product which is N95. Required: Should this special offer be accepted or rejected? Show computations using the total difference approach and relevant cost approach. [25 marks]