4-29 * Special Order Kingston Ltd produces cricket bats for kids that it sells for $64 each. At capacity, the company can produce 50000 bats a year. The costs of producing and selling 50 000 bats are as follows: Cost per bat Total costs $24 6 2 Direct materials Direct manufacturing labour Variable manufacturing overhead Fixed manufacturing overhead Variable selling expenses Fixed selling expenses Total costs 10 $1 200 000 300 000 100 000 500 000 200 000 400 000 $2700 000 4 8 $54 Required 1. Suppose Kingston Ltd is currently producing and selling 40000 bats. At this level of production and sales, its fixed costs are the same as given in the table above. Woden Ltd wants to place a one-time-only special order for 10 000 bats at $50 each. Kingston Ltd will incur no variable selling costs for this special order. Should Kingston Ltd accept this one-time-only special order? Show your calculations. 2. Now suppose Kingston Ltd is currently producing and selling 50 000 bats. If Kingston Ltd accepts Woden Ltd's offer it will have to sell 10000 fewer bats to its regular customers. (a) On financial considerations alone, should Kingston Ltd accept this one-time-only special order? Show your calculations. (b) On financial considerations alone, at what price would Kingston Ltd be indifferent between accepting the special order and continuing to sell to its regular customers at $64 per bat? (c) What other factors should Kingston Ltd consider in deciding whether to accept the one-time-only special order