A manufacturer of children's clothing, Kids Wear Pty Ltd, has been approached to supply a special order for 10 000 designer shirts at a price of $12 per shirt. The variable costs of producing a shirt are $8 per shirt. Kids Wear Pty Ltd has sufficient spare capacity to manufacture the order without affecting its normal production andthe order is within the relevant range so there will be no impact on fixed costs. Should Kids Wear Pty Ltd accept the order?

a.Yes, as profits will be increased by $120 000

b.There is insufficient information to tell whether Kids Wear Pty Ltd should accept the order or not

c.Yes, as fixed costs will not change

d.No, as the price being offered of $12 per shirt is not sufficiently above the full cost of production of $8 per shirt

e.Yes, as profits will be increased by $40 000