Mansour Automotive Company manufactures an engine designed for motorcycles and markets the product using its own brand name. Although Mansour has the capacity to produce 40,000 engines annually, it currently produces and sells only 30,000 units per year. The engine normally sells for Rs. 500 per unit, with no quantity discounts. The unit-level costs to produce the engine are Rs. 200 for direct materials, Rs. 150 for direct labor, and Rs. 30 for indirect manufacturing costs. Mansour expects total annual product- and facility-level costs to be Rs. 540,000 and Rs. 750,000, respectively. Assume Mansour receives a special order from a new customer seeking to buy 1,000 engines for Rs. 370 each.(20)

Required

Should Mansour accept or reject the special order? Support your answer with appropriate computations.