Question: QUESTION 1 (5 MARKS) Lee Rubber Tech presently operates at 70% capacity and be able to produce 100,000 units of run flat tyres per year

QUESTION 1 (5 MARKS) Lee Rubber Tech presently operates at 70%

QUESTION 1 (5 MARKS) Lee Rubber Tech presently operates at 70% capacity and be able to produce 100,000 units of run flat tyres per year at sales price RM2,040 per unit. The total manufacturing cost for the tyre per unit is RM1,560 including fixed cost RM300 per unit. A week ago, sales department of Lee Rubber Tech received one-time offer from foreign BWM Cars company to buy 10,000 units of run flat tyres for RM1,470 per unit. Accepting the offer will result one off additional export charges of RM300,000. Required: Please determine whether Lee Rubber should accept or reject the special order (show the calculation)

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