TTOTAL VARIABLE =1600,000 AND TOTAL CONTRIBUTION = 400,000 AND FIXED COST = 100,000

QUESTION TWO Mavaya Co Ltd makes T-shirts for local soccer, baseball, basketball, and other sports teans. The owner purchases the T-shirts and prints graphics on the shirts for each team. The graphics were designed several years ago, so design costs are no longer incurred. On average, company sells 1,000 shirts cach month. Typical monthly financial data follow: Total Monthly data for 1,000 T-Shirts Sales revenue 2000,000 Variable costs Direct materials 800,000 Direct labour 200,000 Manufacturing overhead 600,000 Total variable costs 1600,000 Contribution Margin 400000 Fixed costs 100,000 Profit 300,000 The monthly information provided relates to the company's routine monthly operations. A representative of the local high school recently approached the company to ask about a one-time special order. The high school will be hosting a state-wide track and field event and is willing to pay Mazava Co.Ltd TZS.2,600 per shirt to make 700 custom Shirts for the event. Incurs the same variable costs of TZS.1,600 p.u. to produce the special order, and he will pay a firm TZS.60,000 to design the graphics that will be printed on the shirts. This special order will have no other elfect on the Company's monthly fixed costs. Required: Determine whether Mazava should accept the special order? (05 Marks)