8 marks question

CoursHeroTranscribedText: Question 1 Maidstone Paper Products, Inc., manufactures boxed stationery for sale to Not yet answered specialty shops. Currently, the company is operating at 85 percent of Marked out of 8.00 capacity. A chain of drugstores has offered to buy 25,000 boxes of Maidstone's blue-bordered thank-you notes as long as the box can be Flag question customized with the drugstore chain's logo. While the normal selling price is $5.50 per box, the chain has offered just $2.80 per box. Maidstone can accommodate the Special order without affecting current sales. Unit cost information for a box of thank-you notes follows: Direct materials $1.67 Direct labour 0.3 Variable overhead 0.07 Fixed overhead Total unit cost $3.97 Fixed overhead is $410,000 per year and will not be affected by the special order. Normally, there is a commission of 5 percent of price; this will not be paid on the special order since the drugstore chain is dealing directly with the company. The special order will require additional fixed costs of $13,500 for the design and setup of the machinery to stamp the drugstore chain's logo on each box. Required: Based on the above information, company has two alternatives/options. Which alternatives/options is more cost effective and by how much? Provide all the workings/calculations