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Question 2 Accounting for Sustainability [15 Marks] Granville Ltd is amanufacturer ofspices currentlyconsidering making dramatic changes to the company. It currently has production facilities in Gold Coast, lQueensland, as well as in Asia. The CEO, Jim Carlos, is concerned about several issues currently facing the company and she would like to solve these using a sustainability approach. First, the major supplies of spices are imported om the small countries of East Asia. In both countries toxic chemical sprays are used on plantations, and these sprays have a long life. The spice processors in both countries pay their employees only A33 per hour. The employees work long hours and breathe in chemical fumes, which over time may burn their lungs. Jim is considering setting up a factory for preliminary processing of spices in East Asia. Finance manager, Belen Bilanco, believes that setting up this factory is a good idea, as the setup costs will be only A312 million. The current cost of processing spices at Gold Coast is $0.33 per kilogram but will fall to $0.11 per kilogram if pre-processing is undertaken in East Asia. The Gold Coast gure is based on the following costs: Cost per kg Direct labour $19 per hour to process 126 kilograms 50.1508 Variable overhead $5 per hour to process 126 kilograms 0.0397 Fixed overhead 5145 I100 per mm: to produce 1 G39 42? 0.1 5 kilograms Total cost per kilogram $0.33 Matt Carlton, the production manager, believes that the quality of the nal spice products will not reduce if the pre-processing is undertaken offshore Second, although the Gold Coast plant currently meets the required environmental emissions standards, it has been prosecuted in the past for several violations ofair pollution standards, and neighbours still complain about the smell. An improved filtering system would cost $290 Dill] to purchase and $17 500 per annum to run. Helen Bilanco believes there would be no nancial benets in improving the air quality since the facility meets government standards He does not think that the new system shon be purchased. The quality manager, Jullian Ses, disagrees and believes that the improvements would enhance the company's reputation and reduce discolouration of the buildings. The local newspaper has twice run stories that were critical of Hannah Pty Ltd. A recent story suggested that they were also water polluters, an assertion that the company claims is untrue. No contaminated water is released into the waterways; it is all evaporated using recycling ponds and a septic system. The third problem is continuing low employee morale at the Gold Coast plant. The previous production manager came to the plant om the army, and ran the factory very smoothly and efciently, but using a military style. This led to serious clashes with some oftbe production 2. staff and 12 of these staff continue to be unhappy. Jim has thought about offering these staff redundancies at a total cost 013285 DOG. Another alternative is to engage an external consultant to act as a mediator between management and staff, to see if problems can be resolved and to help improve the morale. The approximate cost of the consultant would be $43 000. Belen Bilanco is opposed to this as the performance indicator for staff in the company's social and environmental report is already satisfactory and is getting better every year. The money would therefore he wastedin trying to calm only 12 staff. Required: For each of the three problems previously outlined: A. Explain the nancial, environmental, social and broader economic issues that the company needs to take into account. [It] Marks] B. Discuss any thher information that the company may need to gather before it can resolve these issues. [5 Marks]