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A major health food chain has approached Foamy Ltd to ask if the company would be willing to provide 100,000 drinks in the forthcoming year

A major health food chain has approached Foamy Ltd to ask if the company would be willing to provide 100,000 drinks in the forthcoming year at a price of 80p per drink. The company will only accept 100,000 drinks. Assume that the company has finalised production and sales plans for the year at a price of 1.10 and a volume of 130,000 drinks. Required:

d. Assess whether Foamy Ltd should accept this special order and calculate the companys profit or loss if the order is accepted.

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