Kintectics Ltd has the capacity to manufacture 500,000 electrical pumps a month at a variable cost of $15 per pump and fixed costs of $500,000 per month. These fixed costs will not vary in the short-term i.e., it would take at least 6 months for Kintectics Ltd to vary the fixed costs it incurs.

In the current month, Kintectics Ltd fulfilled orders for 400,000 pumps at $25. These numbers can vary from month to month.

A special (additional) order of 100,000 pumps has been received today which is the last day of the current month, at a price of $20 each. This special order requires the pumps to be made and supplied in the following month.

Which of the following statements are correct:

1. The relevant cost of the special order to Kintectics Ltd is $1,500,000

2. The relevant cost of the special order to Kintectics Ltd cannot be determined with the available information

3. The fixed cost of $500,000 is not relevant in deciding whether Kintectics Ltd should accept the special order

Group of answer choices

Statement 1 only

Statement 2 only

Statement 3 only

Statement 1 and 3 only

Statement 2 and 3 only