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A customer offers a special order of 5 , 0 0 0 units to XYZ Ltd . If the order is accepted, the fixed cost

A customer offers a special order of 5,000 units to XYZ Ltd. If the order is accepted, the fixed cost for XYZ Ltd, would increase by $1,25.000 and extra labour would require an overtime premium of 25%. However, 5% discount can be availed for all material if order is accepted due to size of procurement XYZ Ltd. currently makes 50.000 units per annum and sells them at $30 each The current operating performance details of the XYZ Lid. Is as follows: Sales (50.000 units 30 each): Material cost R 500.000, Labour Rs.680000; Fixed cost; Rs 200,000. What is the total differential cost associated with the order?

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