1. ABC Ltd manufactures a single product and sells N 30 per unit. There is increased demand for the product. The Direct Material is N 8, Direct labour (2 hours) is N 4 and Variable overheads is N 4. The labour force is working at full capacity and no extra time is available. Mr. X has approached ABC Ltd with a request for the manufacture of a special order at N 8,000. Also, 600 hours labour will be required and cost of the order will be N 3000 for Direct Material. Variable overhead per hour will be N 2.

Required

1. Should the order be accepted?
2. Why?