CAN YOU PLEASE ANSWER THE QUESTION 3.

White Bolder Investments (WBI) You are an intern working for WBI, a large investment advisory services in Sydney. Among other regular customers, WBI has been providing advisory services for Jumbo Bank (JB) and Ombrelloni Felici (OF). For the sake of simplicity, this assignment does not consider taxes and other fees. You might have to use information from previous questions for answering information for following questions and whenever possible support your arguments with your calculations. Question 1 One of your LinkedIn contacts who poses himself as an entrepreneur and is starting a trendy business shirt venture has offered you a one chance in a lifetime of becoming his partner in this new incredible venture. The entrepreneur has offered you a partnership in this venture under the condition you share with him the WBI employees and customers contact list. The entrepreneur has guaranteed you a commission for any WBI employee or customer who buys one of the trendy business shirts. Required Please state dhe of the ethical standards, as provided by the Institute of Management Accountants (IMA) Statement of Ethical Professional Practice, Which would be jeopardized if you accept the business offer and justify why this andard is being jeopardized (there might be me re than one ethical standard being jeopardized but only one is required for this question). Please elaborate on how the business offer could be accepted without jeo Aardizing any ethical standar (Chapter 1, 10 mark/ Question 2 WBI board is discussing how much a business advisor should charge per hour of service. WBI has budgeted to supply 300,000 hours of business advisory service for the forthcoming year. Its variable cost is estimated at $35 per hour and its fixed costs are estimated at $4,000,000 for the forthcoming year. The board has been discussing whether to use a cost-plus approach or perhaps examining the demand levels. The marketing department has the following estimation on demand levels at different prices: Table 1-Demand levels Price per hour Demand in hours $64 310,000 $65 300,000 $66 280,000 $67 270,000 $68 250,000 Required a) Calculate the price per hour VBI should charge based on a cost-plus approach for pricing the service at full cosa plus 35%. (Chapter 2,5 marks) b) Considering WBI can meet any demand level in Table 1 and that fixed costs will remain unchanged for all the preceding demand levels, What price per hour should WBI charge based on demand levels? (e.g., Aercise 12.13, Chapter 12, 14 marks) c) State on benefit of the cost-plus approach and one benefit of the demand levels approach applied to WBI and, between the two approaches, which approach should WBI board choose for long-term planning of the business advisory servile and why? (Chapter 12, 10 marks) Question 3 Jumbo Bank (JB) is a bank specialized in advisory for loans and savings for retail customers and corporate customers. The manager responsible for retail customers is Kim Schifino and the manager responsible for corporate customers is Matt Johnson. JB has 'Know Your Customer' (KYC) procedures for their retail customers and corporate customers; the procedures are (i) Customer Identification Program (CIP), (ii) Customer Due Diligence (CDD), and (ii) Ongoing Monitoring. JB currently uses the following cost-allocation rate per procedure, based on the following cost drivers used as the allocation base for the previous year: Table 2-Cost-allocation rate KYC procedures Cost driver used as allocation base CIP Applications (potential customers) CDD Applications (potential customers) Ongoing Monitoring Ongoing customers Quantity 600 600 55,000 Cost-allocation rate $55.0 $125.0 $20.0 Currently, there has been much discussion regarding how much each procedure costs for each activity for retail customers and corporate customers. The accounting department has provided a breakdown for costs for each type of customer and procedure from the previous year. Table 3 - Costs of procedures per type of customer KYC procedures Retail customers Corporate customers Total CIP $25,000 $8,000 $33,000 CDD $25,000 $50,000 $75,000 Ongoing Monitoring $500,000 $600,000 $1,100,000 Total costs $550,000 $658,000 $1,208,000 The manager responsible for corporate customers, Matt Johnson, is concerned there is a product-cost cross- subsidisation. As an example, he argues the cost-allocation rate of $20 regarding ongoing monitoring used for his corporate customers is artificially high because of the costs of ongoing monitoring for retail customers. The manager responsible for retail customers, Kim Schifino, argues exactly the opposite, that the corporate customers are the one pushing the cost-allocation rate higher, because, when compared to the retail customers, they are few in numbers. The commercial department has the breakdown of applications (potential customers) and ongoing customers from the previous year. Table 4-Customers KYC procedures CIP CDD Ongoing Monitoring Retail customers Corporate customers Total customers 500 100 600 400 200 600 50,000 5,000 55,000 Page 5 of 9 Required a) Calculate the cost rate per unit of the cost driver for each KYC procedure for retail customers and corporate customers. (e.g., Exercise 11.11 and 11.12, Chapter 11,5 marks) b) Explain whether there is evidence of product-cost cross-subsidisation between retail customers and corporate customers and who is correct, the manager responsible for corporate customers or the manager responsible for the retail customers. Use your calculations for supporting your argument. (e.g., Exercise 11.11 and 11.12, Chapter 11, 10 marks)