Exercise 9.4. The production manager of your organisation has approached you for some costing advice on project X, a one-off order from overseas that he intends to tender for. The costs associated with the project are as follows: You ascertain the following: (i) Material A is in stock and the above was the cost. There is now no other use for material A, other than the above project, within the factory and it would cost 1,750 to dispose of. Material B would have to be ordered at the cost shown above. (ii) Direct labour costs of 6,000 relate to workers that will be transferred to this project from another project. Extra labour will need to be recruited to the other project at a cost of 7,000. (iii) Supervision costs have been charged to the project on the basis of 331/3% of labour costs and will be carried out by existing staff within their normal duties. (iv) Overheads have been charged to the project at the rate of 200% on direct labour. The company is currently operating at a point above break-even. The project will need the utilisation of machinery that will have no other use to the company after the project has finished. The machinery will have to be purchased at a cost of 10,000 and then disposed of for 5,250 at the end of the project. The production manager tells you that the overseas customer is prepared to pay up to a maximum of 30,000 for the project and a competitor is prepared to accept the order at that price. He also informs you the minimum that he can charge is 40,000 as the above costs show 32,000, and this does not take into consideration the cost of the machine and profit to be taken on the project. Required: Cost the project for the production manager, clearly stating how you have arrived at your figures and giving reasons for the exclusion of other figures