Crawley Tyre has been approached by a major international company who distributes cleaning machines throughout Europe, North America and Canada. They have asked Crawley Tyre to supply 20,000 wheels at $18.00 each, in the second quarter. Crawley Tyre has enough excess capacity to produce this extra order. It intends to run two extra shifts per day and 3 shifts on the weekend to take production to 24 hours a day for 7 days a week for a period of 6 weeks during the second quarter. It is expected that this will have no impact on fixed overheads.

Payment for this order will be 10% of total in the second quarter and the balance received in the 3rd quarter 2022.

3

To assist management with deciding to accept this order, you have been asked to provide a report on the impact that this order will have on the budget.

Required:

You are required to use your computer program in Excel to conduct a scenario analysis of the impact this order has on the budget and write a 200-300 words report for the management.

The content of the report is up to the group, but it must provide relevant information to assist management with its decision.

The report should be accompanied by hard and soft copies of the impact. Marks for the revised cash flow demonstrating the use of computer program for a

scenario analysis Marks for the 200-300 words report: Total Marks for Part B

25 marks 20 marks 45 marks