Decision making is an important function of Cost and management accounting. The decision should be profit maximizing. The knowledge of Relevant cost and revenue is vital to make correct decisions. Opportunity cost is significant part of relevant costing. Dac. company is manufacturing single product. The company is currently working at 90% capacity producing 120000 units. Total manufacturing cost for the company is OMR 300,000 of which OMR 70000 is fixed cost and remaining is variable cost. Fixed cost is applicable for maximum level of capacity. A new customer has approached the Dac, company to purchase 10,000 units per year at a price of OMR 3.5 per unit. Currently company is selling its product for OMR 4.25 per unit. If company takes the order of the new customer its current sale will fall by 3 units for every 12 units sold to new customer. Required: a) Using the above data of Dac. Company and the concept of opportunity cost suggest if company should accept the order of new customer or not?( Show are the steps and calculations clearly to reach to the decision) b) Evaluate different elements of relevant costing