AA Anbbede AabbCode AalbCcDdB Aal Normal Text Standard Question 1 (Total 20 marks) Ricky is the operations manager of a company making leather soccer balls for children; and with recent increase in the costs, he wishes to look into the productivity of his company. He would like to know if his company is having a 5% increase in productivity in order to be qualified for a bonus. Please see the annual data below: Unit Produced Labour (hours) Capital Invested ($) Materials (Ton Year 2018 500.000 90,000 10,000,000 240 Year 2019 500.000 81,000 11,000,000 228 - The details of the various cost items are: S40 per labour hour and $18 per kg of materials -While for the capital expense, it is at 0.9% per month of capital investment a)- Calculate the productivity percentage change for each category in the table below (9 marks). Some answers have been shown for your reference, Please make sure you are having all figures compared to the same unit of measured Year 2018 Year 2019 Cost or Rate Monthly Cost 2018 Monthly Productivity Cost 20194 Change (%) 500.000 500.000- 90,000- 81,000- 40- 3000004 Unit Produced Labour (hours) Capital Invested (S) Materials (Tone 10,000,000 11,000,000 0.9% 99000- 240- 2284 184 360000- Sub-total b). Will Ricky get his productivity improvement bonus for Year 2019? Why? (2 marks) The hose of the comanie nou considering to outsource the operation to thindartsuche . 500,000 500,000- Rate | Cost 2018 WWII I9uLIVI Cost 2019. Change (%) 90,000 300000 Unit Produced Labour (hours) Capital Investis) ...erials (Ton) 81,000 40 11,000,000 0.9% 99000 10,000,000 240 228 360000 18 Sub- total t b). Will Ricky get his productivity improvement bonus for Year 2019? Why? (2 marks) The boss of the company is now considering to outsource the operations to a third party who offers a product transfer cost of $16 per unit that covers the materials, labour and capital costs. c). What would you suggest the boss to make the decision based on the cost? (3 marks) d)- What other factors and risks the boss should consider beyond the cost implications? Please discuss three of them. (6 marks) ( B ) LER