2 (20 marks) Namibia Products produces and sells hockey sticks for N$32 per stick. The company has capacity to produce 50 000 sticks. The following are the costs that are incurred by the company when operating at full capacity: Direct material Y Direct labour Variable manufacturing overheads Fixed manufacturing overheads Variable sales expenses Fixed sales expenses Total cost Per stick N$12 Total N$600 000 N$3 N$150 000 N$1 N$50 000 N$5 N$250 000 N$2 N$100 000 N$4 N$200 000 N$27 N$1 350 000 The Hockey Association of Namibia has approached the company for the production of 10 000 "Lekker sticks". Lekker sticks should meet specific requirements in order to comply with international standards. They are willing to pay a fixed amount of N$5.00 for each stick and furthermore they will reimburse Namibia Products for their manufacturing cost per unit (variable and fixed), as listed above. They will also pay the fee of the graphic designer. Specifications for the special order: For the manufacturing of the special Lekker sticks, the company must use material Y. Namibia Products has this material Y in inventory. Page 10 of 16