owner Per Oper recovered workstu recent changes were svet. Do you want to continue working where you to 728 X 5 New Way is a newly established subsidiary of love for fed, a company that focuses on different innovative products to promote sustainable society. New Way L. is located in a town in Central Queensand. During the COVD pandemic, many people around the village have lost in holy love for ute Lidhus established this cowy na 2020 cal enterprise to help local people earnings. Al workers who work in the factory are women and men ingetown. They produce handmade coton shopping bags to supply to the Australian market. Their single product is a 30cmx40 cm cotton hooping bag with w Way togethed at the front of the hug The company rentan unused space in a local premises to store materials and finished products before being hipped to stoners Duit to the Covio 13 restriction, the company powing machines to workers so they can produce at their own premises. Every day, they will go to the store to get the materials for the day and return the finished products of the previous day. Currently, the company has sewing machines and workers, working hours per day, 5 days per week, so weeks per year. However, sometimes when urgent orders are received, wortes can work 10 houn per day and over the weekend, and increate the maximum capacity of the company to 10 hours per day and do prek Overtime work will be rewarded by sharing of the al from the order Perch worker working at home, the company reimburses 50.50 per direct labour hout for the vie. The company opene ending finished goods inventory as finished good shipped everyday, and raw materials quals to 20of raw material needed for next month production 30 11 16 Standard costs per bag Price per unit of - Direct material costs (DM) IN Cotton cloth im Zoper uit 2n Lagos 21 Standard DM cost per bag Quantity of material per bag 0.15 1 1 7 2.2 05 Directorul couts/unit 105 2.2 05 3.75 a Direct labour costs (DL) 24 Outine wine and stitching 35 Standard cost per bag DL hour perba 0.15 0.15 Labour rate per hours/h 22 Labour costs 5/unit 33 c 0 25 Production capacity 30 Per hour 91 Per day 12 Per week 13 Per year (50 weeks 34 Normal tapacity (unit) 53 424 2,120 105,000 Maximum capacity units) 53 530 3,110) 159,000 $ per year 35 Manufacturing overhead costs 16 Variable MOH Indirect materials 37 Variable MOH-Utilities 35 F MON - Machine maintenance Fred MOL Depreciation of machinery 40 MOHurance 41 MOH Cleaning MOH - Rent 3 Total MOH per unit 1,060 3,000 1,080 4100 1200 12,000 12.000 Allocation based Output Direct labour hour Output Output Output Output Output Budgeted quantity Allocation of allocation hase rate 106,000 0.01 16,000 0.50 106,000 0.01 106,000 0.05 106,000 0.01 105,000 0.11 106,000 0.11 MOH per ult 0.01 0.08 0.01 OLOS 0.01 0.11 0.11 0.38 Standard cost per bag 46 OM D 1 MOH Standard per bag SO Markup $ 3.25 3.30 038 7.43 HREFI Operational data 2021 53 Production du 55 Sales volumen 56 Salon 15/unit 57 Cotton Coth Purchased 3. Purchased 5 Lago Rocha Cotton Cloth pricam per un unit lagunt Cotton Cathed Budget July-Dec 2011 54.000 54,000 REF: 8.100 54,000 54 000 700 2.20 0.50 3.100 54.000 54000 3,100 22 530 4000 540 2.400 DO 1.000 000 Adual data July Sept 2021 30,000 30,000 REFI 5,000 35,000 15.000 2.50 2.00 0.70 5,175 31.500 27.000 450 25 350 2475 270 200 300 1000 1000 - Dust lahut hinged thing 57 Direct labore Variatie MOR rett materials Vana MORU MOH Manoe 11 MOR.Dronen 7 MONT MOH Mant MUST FILL-STUDENT DETAILS DATA QUESTION 1 Ready QUESTION 2 QUES 27 18 To produce 100.000 bagt per year, 8 extra sewing machines will need to be purchased. Suzuki has also contacted some suppliers of professional sewing machine and got a quote for $3,000 each induding delivery and installation. In addition, Suzuki will need to recruit more workers with the same hour rate currently paid to the existing workers (e $25 per hour). However, as the WWF bags have printed WWF logo, the labour time per unit wil reduce to 0.1 hour She also think about other costs, including (1) Indirect material: $0.01 per bag (2) maintenance: 3 hours of maintenance each month for all new machines, at $30 per hour depreciation straight line method for years with no residual value 14) reimbursement for utilities: $0.5 for each direct labour hour Required: 1. Estimate catiflow before tax from the project with WWF i New Way Ltd. wants to achieve 40% contribution margin per unit of bag You must explain your answer.( marks) 2. Calculate NPV after tax for the project. Tax rate is 27.3%, intemat required rate of return is 6%. (6 marks) 3. Given the WWF wants the cost to be as low as possible, toplain your answer uning aloitations, (5 marks) what will be the lowest price that New Way Ltd. can sell bags to WWF so New Way Ltd. can at least break even 21 31 34 25 36 22 30 OFTICE USE ONLY 31 32 21 Requirement Original mark Moderated mark 2 3 Total 35 36 0 0 33 39 owner Per Oper recovered workstu recent changes were svet. Do you want to continue working where you to 728 X 5 New Way is a newly established subsidiary of love for fed, a company that focuses on different innovative products to promote sustainable society. New Way L. is located in a town in Central Queensand. During the COVD pandemic, many people around the village have lost in holy love for ute Lidhus established this cowy na 2020 cal enterprise to help local people earnings. Al workers who work in the factory are women and men ingetown. They produce handmade coton shopping bags to supply to the Australian market. Their single product is a 30cmx40 cm cotton hooping bag with w Way togethed at the front of the hug The company rentan unused space in a local premises to store materials and finished products before being hipped to stoners Duit to the Covio 13 restriction, the company powing machines to workers so they can produce at their own premises. Every day, they will go to the store to get the materials for the day and return the finished products of the previous day. Currently, the company has sewing machines and workers, working hours per day, 5 days per week, so weeks per year. However, sometimes when urgent orders are received, wortes can work 10 houn per day and over the weekend, and increate the maximum capacity of the company to 10 hours per day and do prek Overtime work will be rewarded by sharing of the al from the order Perch worker working at home, the company reimburses 50.50 per direct labour hout for the vie. The company opene ending finished goods inventory as finished good shipped everyday, and raw materials quals to 20of raw material needed for next month production 30 11 16 Standard costs per bag Price per unit of - Direct material costs (DM) IN Cotton cloth im Zoper uit 2n Lagos 21 Standard DM cost per bag Quantity of material per bag 0.15 1 1 7 2.2 05 Directorul couts/unit 105 2.2 05 3.75 a Direct labour costs (DL) 24 Outine wine and stitching 35 Standard cost per bag DL hour perba 0.15 0.15 Labour rate per hours/h 22 Labour costs 5/unit 33 c 0 25 Production capacity 30 Per hour 91 Per day 12 Per week 13 Per year (50 weeks 34 Normal tapacity (unit) 53 424 2,120 105,000 Maximum capacity units) 53 530 3,110) 159,000 $ per year 35 Manufacturing overhead costs 16 Variable MOH Indirect materials 37 Variable MOH-Utilities 35 F MON - Machine maintenance Fred MOL Depreciation of machinery 40 MOHurance 41 MOH Cleaning MOH - Rent 3 Total MOH per unit 1,060 3,000 1,080 4100 1200 12,000 12.000 Allocation based Output Direct labour hour Output Output Output Output Output Budgeted quantity Allocation of allocation hase rate 106,000 0.01 16,000 0.50 106,000 0.01 106,000 0.05 106,000 0.01 105,000 0.11 106,000 0.11 MOH per ult 0.01 0.08 0.01 OLOS 0.01 0.11 0.11 0.38 Standard cost per bag 46 OM D 1 MOH Standard per bag SO Markup $ 3.25 3.30 038 7.43 HREFI Operational data 2021 53 Production du 55 Sales volumen 56 Salon 15/unit 57 Cotton Coth Purchased 3. Purchased 5 Lago Rocha Cotton Cloth pricam per un unit lagunt Cotton Cathed Budget July-Dec 2011 54.000 54,000 REF: 8.100 54,000 54 000 700 2.20 0.50 3.100 54.000 54000 3,100 22 530 4000 540 2.400 DO 1.000 000 Adual data July Sept 2021 30,000 30,000 REFI 5,000 35,000 15.000 2.50 2.00 0.70 5,175 31.500 27.000 450 25 350 2475 270 200 300 1000 1000 - Dust lahut hinged thing 57 Direct labore Variatie MOR rett materials Vana MORU MOH Manoe 11 MOR.Dronen 7 MONT MOH Mant MUST FILL-STUDENT DETAILS DATA QUESTION 1 Ready QUESTION 2 QUES 27 18 To produce 100.000 bagt per year, 8 extra sewing machines will need to be purchased. Suzuki has also contacted some suppliers of professional sewing machine and got a quote for $3,000 each induding delivery and installation. In addition, Suzuki will need to recruit more workers with the same hour rate currently paid to the existing workers (e $25 per hour). However, as the WWF bags have printed WWF logo, the labour time per unit wil reduce to 0.1 hour She also think about other costs, including (1) Indirect material: $0.01 per bag (2) maintenance: 3 hours of maintenance each month for all new machines, at $30 per hour depreciation straight line method for years with no residual value 14) reimbursement for utilities: $0.5 for each direct labour hour Required: 1. Estimate catiflow before tax from the project with WWF i New Way Ltd. wants to achieve 40% contribution margin per unit of bag You must explain your answer.( marks) 2. Calculate NPV after tax for the project. Tax rate is 27.3%, intemat required rate of return is 6%. (6 marks) 3. Given the WWF wants the cost to be as low as possible, toplain your answer uning aloitations, (5 marks) what will be the lowest price that New Way Ltd. can sell bags to WWF so New Way Ltd. can at least break even 21 31 34 25 36 22 30 OFTICE USE ONLY 31 32 21 Requirement Original mark Moderated mark 2 3 Total 35 36 0 0 33 39