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Transcription of this question: 4.Aran and Kayla decided to launch Detox using batch production. It has now been on themarket for six months. Detox is showing strong growth, although sales for the first six monthswere less than a quarter of Kayla’s target of 160000 bottles for the first year. The price ofDetox is $2.50 per bottle. The cost of goods sold is $160 and the operating costs beforeinterest and tax are $20000 per year.Enrich sales have not grown much and Aran is very disappointed. Customers, mainlyathletes, do not use the product frequently and it is difficult to find new customers. However,research into customer perceptions indicates a very strong brand, resulting largely fromAccord’s corporate social responsibility (CSR) and strong customer loyalty.Aran does not like the way the business is organized by product and wants to change it sothat it is organized by function instead.Following the success of Detox, Kayla wants to produce a range of snack bars basedon Enrich flavours and recipes. Accord would use the Enrich brand name for the snackbars. The market for healthy snack bars is very competitive and dominated by a few largecompanies who spend large amounts of money on advertising. The market is growing rapidly— some market researchers estimate by 34 % per annum. There are many examples of smallbusinesses entering the market successfully on a small scale. Kayla estimates the proposalwould involve an investment of $100 000, with forecast net returns of $80000 for four years.Aran thinks that the money could be better spent on marketinq Enrich drinks.(a)(b)(c)(d)Define the term batch production.Based on a target of 160 000 for the first year of production at Detox, calculate:(i) the gross profit generated by Detox;(ii) the net profit margin of Detox.With reference to Accord, explain one advantage and one disadvantage of anorganizational structure based on product.Discuss Kayla’s plan to produce a range of snack bars.[2][2][2][10]

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