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Problem 2 (9 marks) Nature Bees produces honeycomb and beewax. The production is made in two decentralised divisions. The Honey Farm Division produces honeycomb at
Problem 2 (9 marks) Nature Bees produces honeycomb and beewax. The production is made in two decentralised divisions. The Honey Farm Division produces honeycomb at a variable cost of $20 per kg. Honeycomb and can be sold at $30 per kg. The Wax Farm Division produces 0.50 kg of beewax from 1 kg of honeycomb at a variable cost of $12 plus the cost of the honeycomb. Beewax can be sold at $95 per kg. The processing of honeycomb into beewax is done by the worker bees in the division's beehive box. The worker bees work 35 hours per week in the beehive box. Required: (a) Propose an ideal transfer price for Nature Bees and explain with calculations why the proposed price is ideal. (6 marks) (b) The current production process at Natural Bees is that Natural Bees receives orders for 45 kg of beewax on a weekly basis. It takes 40 minutes for 2 kg of honeycomb to be processed by into 1 kg beewax in the beehive box. Identify three independent scenarios where the customer wait time would decrease at Natural Bees
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