(a) Standard Sports Ltd produces high quality balls. It has received an offer from a sports store to buy 10,000 balls at `10 per ball. The store would sell the ball for `13 each which is `5 less than...

(a) Standard Sports Ltd produces high quality balls. It has received an offer from a sports store to buy 10,000 balls at `10 per ball. The store would sell the ball for `13 each which is `5 less than is normally charged by dealers selling the company’s product. It is promised by the owner of the store that he would not disclose the maker’s name. The company can produce 1,00,000 balls per year. Planned results for the coming years without considering the order from the store are as follows:

Cost of goods sold contains variable cost of `5 per ball. It is estimated that variable cost of printing the name on the ball is `0.25 per ball. You are required to advise whether the company should accept the offer or not. Will your answer change if the seller’s name is to appear on the ball to be sold by the store?