b) The Ryan Corporation manufactures a single product with the following unit cost for 5000 units:

$

Direct Materials

80

Direct labour

40

Manufacturing overheads (40% variable)

120

Selling expenses (60% variable)

40

Administrative expenses (20% variable)

20

Total unit cost

300

A company recently approached Ryan Corporation about buying 1000 units for $195. Ryan currently sells the models to dealers for $210 per unit. Ryans capacity is sufficient to produce the extra 1000 units.

(i) Should Ryan accept this special order? Justify your answer. (9 marks)

(ii) Determine the minimum price that Ryan should sell each unit for in order to make a profits by $10000 on the special order