Company A wasfoundedthreeyearsagowiththegoalofprovidingparceldeliveryintheAnkh-Morporkregion.

Company B hasapproachedthemanagingdirector of company A. Company Bmanagesonlinesalesanddeliveryforavarietyofbusinesses. Theyhavediscoveredthattheyareunabletomeetthedeliverycomponentofthisserviceandwouldwantcompany Atoassumethisresponsibility. Forthisservice,theyarereadytopay2,000eachmonth.

according to managingdirector of company A, thefollowingwillbenecessarytotakeoverthisservice:

Sorting parcels for delivery, per month: 20 hours

Delivery of parcels, per month: 30 hours

Use of company's warehouse and storage facilities

The company's current monthly costs are:

Sorting staff salary: 2 @ 3,000

Delivery staff salary: 4 @ 1,500

Use of warehouse and storage facilities: 125 per client per month

The warehouse and storage facility was built 3 years ago at a cost of 10,000.

Company current bills clients:

Sorting staff: @ 50 per hour

Delivery staff: @ 30 per hour

Warehouse and storage facilities: @ 350 per month

Sorting and delivery staff work 150 hours each, per month

ShouldCompany A acceptthecompany B'offerof2,000permonthineachofthefollowingscenarios? Yourresponseshouldidentifyandexplainthefollowingfactorsastheyrelatetothedecisions:Opportunitycosts,sunk cost&Contribution

i.Company has sufficient spare capacity

ii. Company does not have sufficient spare capacity

iii.Thecompanyhasenoughsparecapacityforsortingpersonnelbutnonefordelivery staff .Atacostof20perhour, thefirmmayengagetemporarydelivery staff.