Provide Working notes!

Q. Brackley Co. makes fruit pies. The income statement for last year was as follows: Brackley Co. Income Statement Last Year $9,000,000 Sales revenue (3 million pies@ $3) Direct materials Direct labour Production overhead Gross margin Selling & distribution expense Administrative expense Operating income $1,500,000 1,500,000 $3,000,000 6,000,000 $3,000,000 $1,200,000 300,000 1,500,000 $1,500,000 Other information on costs is as follows: Direct materials and direct labour are 100% variable cost. Production overhead is 50% variable cost and 50% fixed cost. Selling expense is 75% variable cost and 25% fixed cost. Administrative expense is all fixed cost. 1). At present, Brackley Co.'s marketing and sales activities are only in Ontario and western Quebec. A grocery chain in Manitoba has asked them to supply 50,000 pies per month at a price of $2 per pie. The marketing manager thinks that the company should refuse the contract because $2 is so far below its normal selling price of $3. The production manager thinks that the company should accept the order as there is spare capacity in the plant, and the variable selling costs (delivery and commission) would not be incurred in respect of this order. Required (a) Should Brackley Co. accept the order or not? (b) If Brackley Co. had no spare capacity in the plant, would the answer be the same