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Sample text

The ownership of the company is shared: 50% by AB and 50% with a local entrepreneur. AB chose this structure because of local legal requirements. A further legal requirement is that, in the case of the company ceasing to trade, AB will be required to reimburse the local entrepreneur the full amount of his original investment (which was $500,000). ter This expansion was initially very successful, with good levels of demand being experienced for IEC's products. Recently, however, a number of environmental factors have rapidly changed.

Com (a) 45 mins ym a 7 Godel (APM 6/14) (Total = 25 marks) tud Godel Goodies (Godel) manufactures a variety of own-label sweets for the two largest supermarket chains in Seeland. The business makes several different flavours of the same basic product. The strategy of the business has been to be a cost leader in order to win the supermarkets' business. The sales of Godel vary up and down from quarter to quarter depending on the state of the general economy and competitive forces. Most of the sweet manufacturers have been in business for decades and so the business is mature with little scope to be innovative in new product development.

Each expense item should be adjusted to reflect its total cost for Order Number 377. co m Order Number 377 comprises 5,000 units of product Zeta. The order will be provided in batches of 1,000 product units. Order Number 377 $ 60,000 Production scheduling (rate per hour  hours per batch) Direct material cost (per unit material specification) 180 Selling – batch expediting (at rate per batch) 60,000 350,000 Engineering design & support (rate per hour  hours per order) 150 Direct labour cost (rate per hour  hours per unit) 34,000 Machine set-up (rate per set-up  number of set-ups per batch) 1,100,000 Production line maintenance (rate per hour  hours per order) Business/facility sustaining cost (at 30% of all other costs) 1,500,000 200,000 Marketing (rate per visit to client  number of visits per order) 12,000 Distribution (tonne miles  rate per tonne mile per batch) 120 Power cost (rate per Kilowatt hour  Kilowatts per unit) 30,000 Design work (rate per hour  hours per batch) Administration – invoicing and accounting (at rate per batch) 24,000 Required Prepare a statement of total cost for Order Number 377, which analyses the expense items into sections for each of four levels, with sub-totals for each level where appropriate.

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