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Part B Dublin Ltd has a total plant capacity of 800,000 units but it is currently operating at 80% capacity. The estimated costs are as
Part B Dublin Ltd has a total plant capacity of 800,000 units but it is currently operating at 80% capacity. The estimated costs are as follows (on the basis of 80% plant capacity, except for fixed costs). Direct Materials Direct Labour Variable and Other Manufacturing Overheads Total Fixed Costs 1,360,000 700,000 140,000 1,200,000 e expected selling price in the domestic market is 14 per unit and the company distributes allit current output locally to supermarkets and shops (5 marks) (0) The company has recently received an order from a client in the United States who is interested in purchasing 200,000 units at a price of 9.50 per unit. The accountant has found out that the product is subject to a special government tax of 20% on the sales price for exported products and the total freight and insurance costs for the consignment will amount to 80,000. Should Dublin Ltd accept to supply the order at the proposed price or should it consider other options? Justify your answer (i) What non-financial factors should the company consider when assessing the above-mentioned proposal? (4 marks) (Total 25
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