Kabelo Pty Ltd Manufactures and markets floaters which they sell for R20 per pack. Current output is R40 000 packs per month which represents 80% of capacity. they have the opportunity to utilise their surplus capacity by selling the product at R13 per pack to a sports chain store who will sell it as their brand product. Total costs for the last month were R560 000 of which R160 000 were fixed costs . This represented a total cost of R14 per pack.

Required

Should Kabelo Pty Ltd accept the Sports store order? Provide detailed calculations in support of your answer.