Hawk Ltd is a manufacturer of various types of heating units. Recently one of its large customers, Venus Ltd has offered a contract to Saturn Ltd for the supply of 750 units. Below are the details for the production of each unit: Material requirements: 2 kg of Material A 4 kg of Material B 3 kg of Material C Note 1: Currently 1,000 kg of Material A is held by the business and it is regularly used by the business. This material of was originally bought for 16 per kg. It would cost 18 per kg to replace it. Sales value is 14 per kg. Note 2: Currently 1,500 kg of Material B is held by the business. This material was originally bought for 37 per kg. The material is not currently used by the business and its scrap value is 17 per kg. The only foreseeable alternative use is as a substitute for material D (in constant use) but this would involve further processing cost of 8 per kg. The current buying cost of material D is 22 per kg. Replacement cost for material B is 26 per kg. Note 3: Material C is regularly used by the business and currently there is none available in the business. An order for 800 kg is shortly to be placed for another project by the business. The price for this material is 80 per kg, but the supplier allows a bulk discount of 10% per kg, for the entire order, for orders of 3,000 kg and above. Skilled labour: Each unit requires 3 hours of skilled labour. It is currently paid at a rate of 27 an hour and skilled labour is hired on a permanent basis. 800 hours can be provided by members of staff who currently have no work to do due to a quiet time. Only taking staff off other work can provide the remaining hours needed for this new project and doing so will bring a lost revenue of 60 per hour and savings from material which is 12 per hour. Semi-skilled labour: Each unit requires 4 hours of semi-skilled labour. It is currently paid 13 per hour. If the required semi-skilled labour for this project is provided by the existing members of staff who are busy, the business will have to hire new employees at a rate of 15 per hour. Equipment: It cost 600,000 when it was bought 4 years ago. Current depreciation charge per year is 20,000 per year. At present, it is be rented out generating income of 40,000 per year. This equipment is needed for one year in this new project. Overheads: It is Hawk's policy to charge a share of the general costs (rent, heating and so on) to each contract undertaken at the rate of 8 for each skilled labour hour used on the contract. If this project is undertaken, the general costs are expected to increase as a result of undertaking the contract by 3,100. Required: Calculate the minimum price at which the contract could be undertaken by Hawk Ltd. For each part, you should clearly show supporting workings and provide a brief explanation for your choice.