A condominium developer has offered NSCI a contract to supply cabinets for all of the units in a new condominium project. NSCI has capacity in the factory to fill the order without impacting production of other cabinets. Luke is in favour of accepting the contract and Michelle is opposed. The details of the offer are as follows:

Direct labour hours

2.6 per unit

Direct labour rate

$38.50 per hour

Direct materials

$128 per unit

Variable overhead

$38 per unit

Fixed overhead (allocated based on direct labour hours)

$42 per unit

Delivery (per cabinet)

$10 per unit

Installation labour hours

0.7 per unit

Installation labour rate

$35 per hour

Selling price

$340 per unit

David would like your independent assessment of whether accepting the contract is in the best interests of NSCI as a whole. He also wants to understand why Luke is in favour of accepting the contract while Michelle is opposed, and if there is anything he can do to avoid these types of conflicts in the future