Billboard Skateboard Company manufactures skateboards. Several weeks ago, the firm received an inquiry from Mayers Sdn. Bhd. Mayers wants to market a skateboard similar to one of Billboard, and has offered to purchase 11,000 units if the order can be completed in three months. The cost data for Billboard's Champion model skateboard are: Direct material Direct labour (0.25 hours @ RM18 per hour) Total manufacturing overhead: (0.5 machine hours @ RM40 per hour) Total RM16.40 RM4.50 RM20.00 RM40.90 The following additional information is available: i. The normal selling price of the Champion model is RM53.00; however, Mayers has offered Billboard only RM31.50 because of the large quantity it is willing to purchase. ii. Mayers requires a modification of the design that will allow a RM4.20 reduction in direct material cost. iii. Mayer's production supervisor notes that the company will occur RM7,400 in additional setup costs and will have to purchase a RM4,800 special device to manufacture these units. The device will be discarded once the special order is completed iv. Total manufacturing overhead costs are applied to production at the rate of RM40 per machine hour. This figure is based in part on budgeted yearly fixed overhead of RM1,500,000 and planned production activity of RM60,000 machine hours (5,000 per month). v. Billboard will allocate RM3,600 of existing fixed administrative costs to the order as part of the cost of doing business. Required: a. Assume that present sales will not be affected. Should the order be accepted from a financial point of view (that is, is it profitable?) Why? Show calculations. b. Assume that Billboard's current production activity consumes 70 per cent of planned machine hour activity. Can the company accept the order and meet Mayer's deadline? C. What options might Billboard consider if management truly wanted to do business with Mayer in hopes of building a long term relationship with the firm