Budgeting Nina is considering producing earrings that she will mostly sell online. She will require specific materials for this product line. She hopes to start selling this line in January and has provided you with her expectations of sales in units (one pair of earrings). January 1200, February 1500, March 1600, April 1750. She needs 20 grams of silver and two pieces of sea glass for each set of earrings. Silver is priced at 81 cents per gram and sea glass is sourced at $5 per piece. She thinks it would be a good idea to have half of the finished goods ready at the end of one month for the next months sales. All materials are available without lag times. The earrings will incur a labour cost of $75 each and sell for $125 each. She doesnt predict any other significant costs at this stage.

Further requirements

c. Write an email to Nina explaining your professional opinion on:

1. The non-financial benefits and costs that might be associated the purchase of the special van; and

2. Nina can source the silver for the sea glass ring from a supplier overseas for $10 per ring. She does not know anything about this supplier except for the 5 price of their silver. Outline some of the issues of accountability and possible implications that may be associated with using this cheaper supplier.

3. From the budgets produced above advise Nina on whether she should commit to the new earrings production.