A company, currently operating at full capacity, manufactures and sells saucepans at 2 each. Current volume is 100,000 pans per annum with the following cost structure.

Operating Statement for year

Sales (100,000 at 2) 200,000

less Marginal Cost

Labour 80,000

Material 50,000 130,000

= Contribution 70,000

Fixed Costs 30,000

= Net profit 40,000

An opportunity has arisen to supply an additional 30,000 pans per annum at 1.18 each.

Acceptance of this order would incur extra fixed costs of 8000 per annum for the hire for additional machinery and the payment of an overtime premium of 20% for the extra direct Labour required. Should this order by accepted?

What other factors need to be considered?