ILLUSTRATION 27 Chair Manufacturers Ltd. Presents the following information for the past year: $ $ Material Cost 1,20,000 Variable Overheads 60,000 Labour Cost 2,40,000 Units Produced 12,000 Fixed Overheads 1,20,000 Selling Price 50 per unit The available capacity is a production of 20,000 units per year. The firm has an offer for the purchase of 5,000 chairs at a price of $40 per unit. It is expected that by accepting this offer there will be saving of $1 per unit in material costs on all manufactured, the fixed overheads will increase by $35,000 and the overall efficiency will drop by 2 per cent on all production. Draft a report to the management giving your recommendations as to whether or not the offer should be accepted