ONLY QUESTION"D" please

This is an analyse a) & b)

Assume you are the management accountant for the Foleo Group. After her meetings with the various business units, Tracey Chen has identified a number of opportunities for the organisation to improve its sustainability performance. One such opportunity is Robyn Smith's suggestion for moving the manufacturing operations of Foleo Fones and Accessories off-shore to address the local residents' concerns. Robyn had done some research and has supplied Tracey with the below data relating to the relocation of Foleo's manufacturing plants offshore (specifically to Guangzhou in southern China). Awwal Direct Labow Costs Anal Direct Materials Corts Annual operational expenses (Variable Manufacturing Overheads) Animal waste produced from operations requiring disposal Cost of waste disposal per ke Annual fixed manufacturing owerheads Average / estimated delivery time for SK Fones and Accessories Estimated Comissions produced by operations per hour of operation Number of employees required by manufacturing operations Nuwber of working weeks per your purwowe Australian Plants Guangzhou Plant $1,953,315 51,074,323 52,976,480 SI,785.888 5343.440 $120.204 710 825 tonnes S120 per omne SITO per omne $623.000 $375,000 5 working days 35 working days 266 grams per hour 430 grams per hour 1.450 1.250 16 weeks 50 weeks Robyn has advised Tracey that the expected relocation costs to Guangzhou would amount to $1,500,000 but that some of these costs could be offset with the sale of Foleo's current manufacturing assets and the sublease of the plants (the amount of which, she has estimated as an inflow of $950,000 at the time of the relocation) As mentioned above, the relocation of Foleo's manufacturing operations will mean the closure of the Australian plants, which will result in all factory workers currently employed at the various Foleo plants being laid off. More than half of these workers have been with Foleo for at least 10 years and many of them have not claimed their accrued long service and annual leave. Tracey has calculated that these workers' entitlements, which must be paid on their termination, will amount to $6,400,000. Whilst the cost savings look good on paper, Tracey has some concerns about the merit of this proposal in terms of its alignment with the Foleo Group's overarching objectives and the newly formulated sustainability objectives. She is also concerned about relinquishing control over the manufacturing process and how this will impact the quality of the products being produced and ultimately customer satisfaction. Tracey has asked you to analyse this data and report back to her with a recommendation that she can take to a meeting with Robyn Smith and Allan Raymond for further discussion. (a) Using the above financial data, prepare a comparison in the space provided, of the financial costs and benefits over the next five (5) years of both options (i.e. relocating the Foleo manufacturing operations and maintaining the current operations here in Australia). Then rank the two (2) options based on the net financial benefits or costs you have calculated. (2 marks) (HINT: Include only the financial costs/benefits in this comparison and ignore the time-value of money.) (a) Using the above financial data, prepare a comparison in the space provided, of the financial costs and benefits over the next five (5) years of both options (i.e. relocating the Foleo manufacturing operations and maintaining the current operations here in Australia). Then rank the two (2) options based on the net financial benefits or costs you have calculated. (2 marks) (HINT: Include only the financial costs/benefits in this comparison and ignore the time-value of money.) Costs/ Benefits Maintaining Australian Operations Relocating Operations to China Year Years 1-5 TOTAL Year Years 1-5 TOTAL initial cutlay for the relocation of operations to China Estimated inflow of funds from sake of sets and subleasing plants Annual Direct Labour Costs Annual Direct Materials Costs Annual operational expenses (Variable Manufacturing Overhead) Annual waste produced from operations requiring disposal Annual fixed manufacturing overheads Payout of entitlements to Australian factory workers TOTAL NET FINANCIAL COST/(BENEFIT (b) Using the non-financial data provided by Robyn Smith, summarise and briefly discuss the environmental and social costs/benefits over the next five (5) years of both options. Then rank the two (2) options based on the non-financial benefits or costs you have discussed. (HINT: Include only the non-financial (or physical) measures in this analysis and explain whether your suggestions are costs or benefits to society or the environment. Include at least four (4).) (1 mark) (c) Identify the stakeholders who would be affected if the above proposal to relocation of the Foleo Group's manufacturing operations was approved and explain how each would be impacted. (HINT: You should identify at least four stakeholders and explain the impact on each of them.) (0.8 mark) (d) Based on your analysis in parts (a), (b) and (c), prepare a report for Tracey to take to her next meeting with Allan Raymond and Robyn Smith, with your recommendation on whether the Foleo Group should relocate its manufacturing operations to China. Justify your recommendation using evidence from your analysis and the case facts. (HINT: Refer to the case study chapters for evidence to support your recommendation but confine your evidence to that which is relevant to this initiative.) (HINT: This is a report, so it should be presented as such i.e. no dot points.) (0.6 mark) . 4G Year 1-5 Year 1-5 aro Total 11,500,000 250.000 1074323 18. Cost Maintaining Relocating Australian Operations 15:08 Operations to China Year Initial outlay for the relocation of operations to China Estimated inflow or funds from sale of assets and subleasing plants Annual Direct 1953,315 Labour costs Annual Direct 2,976,480 Materials Costs Annual 343,440 operational expenses Variable Manufacturing Overheads Annual waste 85,200 produced 1710 1201 from operations requiring disposal Annual feed 625,000 manufacturing overheads Payout of 16,400,000 entitlements 10 Australian factory workers 120.204 20.750 325 1103 375.000 34,000,000 6.400.000 10 years) TOTAL NET FINANCIAL COST BENEFIT) RANK 12,383,43561,917,175 54,550,000 3,446,16581,780,825 112,383,435) be | -5) pyrs] Ans b): As per the non-financial data provided by Robyn Smith and considering the various environmental and social costs benefits over the next five years of both options, we can find the following comparisons: Australian Operations Relocating Operations Chi The working weeks per 1,450.00 weeks 1250 w = 62500 year 58000 weeks No of employees would 1450 workers 1250 workers be less 0 Estimated CO2 200 gram per hour 450 grams per hour emissions produced by operations Average estimated working days 35 working days delivery time for Sifones and Accessories RANK Now, we analyse each of the above points we see the following results: The working weeks at China is more, thus resulting in greater output and profit would increase. But from society angle workers would be jobless. The No of employees would be less, as a result the employee cost would be less. Hence profit would increase. But the society would not gain as a result to employment de-creation Estimated CO2 emissions produced by operations are very high in China, which would be setback for the society Average / estimated delivery time for Sifones and Accessories are very huge it production is Shifted to China, it might result in some loss of sale and decrease in profit, but it can be managed by good inventory system As per a Minute comparison, it would a loss to the organisation on socio-economic angle Lince it would be loosing on