A firm having a capacity of 15,000 units per year produces 10,000 units which were consumed in the home market at Sh.25 per unit. The cost sheet (per unit) on the basis of this output is as under;

Sh.

Material 8.00

Labor 6.00

Fixed factory expenses 2.00

Variable factory expense 1.50

Office expenses 1.00

Selling expenses:

Fixed 0.50

Variable 1.00

Total cost 20.00

A foreign customer is interested in the product but he is willing to buy only 5,000 units and that too at a price of Sh.18.00 per unit.

Required: Advise the firm whether to accept or reject the order