QUESTION 2 (a) SNA Limited produces cement which can be used both locally and abroad. The company is currently operating at 80% capacity for the local market. Results under the capacity (80%) are as follows: GH Sales 6,400,000 Direct materials 2,000,000 Direct labour 800,000 Variable overheads 400,000 Fixed overheads 2,600,000 A company from Benin has placed an order that would utilize 50% of the capacity of the factory. The order when taken will attract 15% below the normal local price and cannot be split but should be taken in full. Management of SNA Company has the following available options: Either to; (i) Reject the order and continue with the local sales only or; (ii) Accept the order and split capacity between overseas and local sales and reject excess local demand; or (iii) Increase capacity to accept the export order and still maintain the local sales by; (a) Acquiring an equipment that will increase capacity by 10% which will result in an increase of GH200,000 in fixed costs, and (b) Start working overtime to meet balance of required capacity. Labour will then be paid at one and a half the normal wage rate. Required: Prepare a Statement of profitability for each of the three (3) options columnally and recommend the best option. (NB: Show working) b) State four (4) qualitative factors that you will consider in accepting the foreign order.