QUESTION FOUR ai Patel Company manufactures leather briefcases sold to wholesalers for Ksh 3,795. The is 7,500 units annually, but normal volume is 5,000 units. The Kachb plant capacity for manufacturing unit and total costs at normal volume follows Type of cost Total costs Unit cost Ksh 980 Ksh 4,900,000 2,250,000 6,000,000 Direct materials Direct labour Manufacturing support Selling and administrative Total costs 450 1,200 670 Ka1 2.20 KaN 15,580000 Ksh 3,300 Ksh 16,500,000 Manufacturing support, selling and administrative costs include both variable and fixed costs; fixed manufacturing support costs for the current year are budgeted at Ksh 4,500,000 and fixed selling administrative costs are Ksh 2,100,000. The company has been approached by a prospective customer who has offered to purchase 1,000 briefcases at Ksh 2,500 each. The customer wants the product packaged in large cartons rather than the normal individual containers and will pick them up in its own trucks. Accordingly the variable selling and administrative costs will be lower by 60% for this order. Required: Should Kachbai accept the offered price of Ksh 2,500 per briefcase? Show your analysis a. What qualitative factors should Kachbai consider when making the final decision b