SHELLA Craft is a widely known company among crafts enthusiasts. It can produce a maximum of 50,000 units of craft art a year. The selling price for the craft is RM200 per unit. Recently, the demand has increased drastically, and it is now operating at full capacity. Below are information relating to variable costs of the product at full capacity: RM Direct materials 2,500,000 Direct labour (2 hours @ RM22.50/hour) 2,250,000 Manufacturing overhead 1,250,000 Fixed manufacturing overhead cost consists of general and administrative salaries, depreciation and rental of buildings which amounted to RM230,000, RM270,000 and per square feet rental of RM10 for a space totalling 17,500 square foot. The company has received an order from ABC travel agency of 10,000 units of its product at a price of RM130 per unit. Its production manager, Cik Wardah, has been asked to come up with an analysis as the company is no longer has the capacity to accommodate the order. After some evaluation, Cik Wardah came up with two proposals as follows