Part 3. Business Planning and Budgeting (30% of assignment marks) The firm has a UK production facility comprising two production lines with an annual capacity of 5,000 units for line 1 and 15,000 units for line 2 where they plan to manufacture loT Routers that provide remote access to devices via a smart Internet gateway. Total annual overheads of E3,MN0,000 (where MN are the last two non-zero digits of your student id) which are allocated by volume: a) Create a Contribution Statement using the template shown below with a column for each production line and total production - critically review (against course materials and wider reading) the profitability of the overall production facility including the Return on Sales (ROS) for both scenarios: 1) The firm is looking to produce a high value router priced at $600 on line 1 and a mid- range router at $300 on line 2 where total variable costs for each of the products are one-third of Sales revenues. i) The firm is concerned in case the cost of parts/materials (from suppliers) increase which will reduce the Product Contribution ratio for the mid-range product to half of Sales revenues - revise the Contribution Statement. b) Examine the two scenarios (for example using CVP charts): discuss the changes to the profitability and evaluate the business situation critically. C) There is space at the UK production facility to also setup a warehouse to provide parts for assembly by an international production partner to sell these loT Routers to their regional markets - discuss this business growth opportunity including product cost effectiveness and competitiveness implications. Contribution Statement Template Sales units: 5,000 15,000 20,000 Line 1 Line 2 Total Sales revenues E nnnn E nnnn E nnnn Less: Parts/Materials (nnnn) (nnnn) (nnnn) Machining Cost (nnnn) (nnnn) (nnnn) Direct Labour (nnnn) (nnnn) (nnnn) TOTAL Variable costs E (nnnn) E nnnn E nnnn Product Contribution E nnnn E nnnn E nnnn Less: Fixed Costs (nnnn) (nnnn) (nnnn) Profit/Loss E nnnn E nnnn E nnnn