3 Belt and Braces DAC makes a single product which sells a single product for 80. It has a full cost of 60 which is made up as follows:

Direct material 16

Direct labour (2 hours ) 24

Variable overhead 8

General fixed overhead 12

60

The labour force is currently is still working at 90% capacity and so there is spare capacity for 2,000 units. A customer has approached the company with a request for the manufacture of a special order of 2,000 units for which she is willing to pay 100,000.

Assess whether the contact should be accepted.