Pretty Dolls Pty Ltd usually sell 30,000 dolls per annum. This year they have excess stock of 10,000 dolls; the dolls usually retail at $35 per unit. The dolls' variable cost per unit is $20 and their annual fixed costs are $30,000. Pretty Dollars Pty Ltd has received "a one-time only expression of interest" from an overseas chain to purchase 7,500 dolls at $29 per unit. What would be the best advice you could provide to Pretty Dolls Pty Ltd?

Choose one answer.

a.

Do not accept the order as the unit variable costs plus the fixed costs per doll amount to $30 per unit which is higher than the $29 per doll offered by the overseas retail chain.

b.

Do not accept the order as the $29 per doll offered does not contribute to covering the fixed costs of $30,000 per annum.

c.

Do not accept the order as a loss will be incurred.

d.

Do not accept the order as it is not worthwhile pursuing "a one-time only expression of interest".

e.

Accept the order as it will lead to a $9 per doll contribution to fixed costs.