A company has prepared the following budget for the forthcoming year: Sales Direct materials Direct labour Factory overheads Variable Fixed Administration overheads Sales commission Fixed selling overheads Profit Time left 2:35:19 (Rs in lakhs) 20.00 3.60 6.40 2.20 2.60 1.80 1.00 0.40 2.00 The policy of the company in fixing selling prices is to charge all overheads other than the prime costs on the basis of percentage of direct wages and to add a mark-up of one-ninth of total costs for profit. While the company is confident of achieving the budget drawn up as above, a new customer approached the company directly for execution of a special order. The direct materials and direct labour costs of the special order are estimated respectively at Rs 36,000 and Rs 64,000. This special order is in excess of the budgeted sales as envisaged above. The company submitted a quotation of Rs 2,00,000 for the special order based on its policy. The new customer is willing to pay a price of Rs 1,50,000 for the special order. The company is hesitant to accept the order below total cost as, according to the company management, it will lead to a loss. Required State your arguments and advise the management on the acceptance of the special order.