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Question 2 The following monthly financial data are for MegaPrint, a company that makes photocopies for its customers. On average, MegaPrint makes 100,000 copies each

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Question 2 The following monthly financial data are for MegaPrint, a company that makes photocopies for its customers. On average, MegaPrint makes 100,000 copies each month. Per unit (RM) Total monthly data for 100,000 copies (RM) Sales revenue 0.08 8,000 Variables costs 0.05 5,000 Contribution margin 0.03 3,000 Fixed cost 2,000 Profit 1,000 MegaPrint was approached by a local restaurant (XYZ Sdn Bhd) that would like to have 20,000 flyers copied. The XYZ Son Bhd asks MegaPrint to produce the flyers for 7 cents a copy rather than the standard price of 8 cents. MegaPrint normal (or maximum) capacity is up to 130,000 copies a month, so the special order will not affect regular customer sales. Variable costs per copy will remain at 5 cents, but production of the XYZ Son Bhd flyers will require a special copy machine part that costs MYR250. This special order will have no other effect on monthly fixed costs. (a) Analyse the Special Order offered by XYZ Son Bhd using the differential analysis and determine whether MegaPrint would accept or reject the special order. Justify your decision. (10 marks) (b) If the maximum capacity of the MegaPrint is 100,000 copies per month, recalculate the analysis and decide whether the company should reject or accept the special order. (5 marks)(c) Analyse any TWO possible assumptions that need to be considered with the differential analysis performed for Tony's T-shirts? (10 marks)

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