Rockhampton Sofa Company is thinking of setting up a plant in Chengdu, China. Operating data for Rockhampton and Chengdu are as follows:

Rockhampton Chengdu Material per sofa $103 $79 Labour time per sofa 30 minutes 90 minutes Labour cost per hour $24.00 $6 Waste per sofa 15 kilograms 35 kilograms Effective working weeks per annum per employee 40 49 Fixed manufacturing cost $100 000 per annum $50 000 per annum Delivery time 7 days 27 days