QUESTION $2$

ANSWER ALL PARTS OF THIS QUESTION

A firm has been invited to tender for a one$-$off contract. The managing director is trying to figure out what price to quote for the contract and wants you to advise her as to what are the relevant costs for the contract. The resources consumed in the contract will comprise materials and labour:

Materials

The contract will require the use of two types of material, material A and material B$.3,500kg$ of material A will be needed, which is a material the firm uses regularly in producing other kinds of goods for other customers. The company currently has $2,000kg$ of material A in inventory which was purchased recently for $19,600.$ Since then, the price of material A has increased by $5\%.$ The contract also requires $300$ kg of material B$.$ There are currently $350$ kg of material B in inventory that originally cost $5,250.$ Material B is surplus to the firm's requirements and, if not used on this contract, will be sold for $12$ per kg $.$

Labour

The contract requires $800$ hours of skilled labour. Skilled labour is paid $16$ per hour. There is a shortage of this skilled labour and the amount available to the firm is currently employed in the manufacture of product X $.$ If skilled labour is diverted from the manufacture of product X to the one$-$off contract, then less of X can be produced and sold. The relevant revenue and costs per unit of product $x$ are as follows:

$\backslash$table$[[,$ per unit$],[$Selling price,${235}_{?}$