Patel Ltd is a small start-up family-owned business that manufactures and sells a single product to customers in UK. The company has recently been approached by a UK university for an order of 75,000 office sets (easy desk & chair) for the opening of four new campuses, which is expected to be their total sales for the year. The CEO is currently reviewing the following information for this order:

Cost per unit
Direct materials per chair	13
Direct labour per chair	9
Variable selling & distribution cost	5
Other variable production overhead	3
Total fixed cost	360,000

The CEO is evaluating the possibility of pricing 36 per office set.

The CEO has noticed the following details on the actual total fixed costs for the year ended 30 June 2019 and is keen to know the impact on profit if product is valued at either marginal cost or full cost (absorption cost):

Factory Rent	46,000
Factory Power Consumption	40,000
Factory Wages	120,000
Storeroom Wages	36,000
Depreciation of factory equipment	28,000
Advertising Expenses	38,000
Administrative Expenses	32,000
Fixed selling & distribution cost	20,000
Total	360,000

The budgeted and actual production units for the year are as follow, with no opening inventory:

	Production units
Budgeted	90,000
Actual	91,000

1. Calculate the anticipated profit for the order of 75,000 chairs by using marginal costing.

(Note that a full statement of profit or loss is not required)