Question NiceView Company manufactures custom-made photographic equipment. NiceView received a special order enquiry from a potential client, a company in Kota Bharu, interested in photographic equipment similar to the equipment NiceView made to earlier clients. NiceView submitted a bid of RM29,500. The following cost data relate to the bid submitted to the company in Kota Bharu.

Direct Material A RM4,500

Direct Material B 6,000

Direct Labour 7,500 RM18,000 Manufacturing overhead 5,600 (20% direct labour costs) 23,600

NiceView adds a 25% profit margin to all jobs, computed on the basis of the total cost. In this client's case, the profit margin amounted to RM5,900 (23,600 25%), producing a bid price of RM29,500. Assume that 60% of manufacturing overhead is fixed, and Niceview is currently operating below its normal capacity. Required: The client offered to buy the equipment for RM22,750. Considering that this one time offer could lead to future business with the client, should NiceView accept the client's offer? Why?