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Transcription of this question: 2.Raapin Guitars (RG)Raapin Guitars (RG) manufactures guitars in Finland. Over many decades, it has built a reputationfor producing high quality, handmade guitars. Apprentices* are recruited when they are 16 or 17years Old. Each apprentice completes a seven-year training program. They are then considered”professional craftsmen” and can expect permanent careers at RG. Each craftsman works with twoapprentices to produce high-quality guitars using a batch production method.Last year, RG sold 4920 guitars at an average price Of €1200 each. It employed 42 professionalcraftsmen earning €50 000 per year and one manager earning €70 000 per year.Annual fixed costsInsuranceRentManager’s and craftsmens’ salaries120 ooo480 oooxApprentices’ salariesLease on equipmentVariable costs per guitarMaterialsSuppliesOther700 ooo600 ooo2253515Recently, RG has struggled to recruit talented teenagers for the apprentice program. Most teenagersin Finland complete secondary school and go to university. Many Of them graduate as engineersand design technologists. As a consequence, Anni Raapin, Chief Executive Officer (CEO) Of RG,is considering changing the overall production process at RG She wants to change from a traditionalbatch production process using professional craftsmen, to an automated flow production process ledby two highly trained engineers. These engineers will manage the new production process operatedby low-skilled workers.Even if RG changes to this new production process, the professional craftsmen will not be maderedundant. The oldest craftsmen will be offered early retirement. Others will become managersOf the new flow production process; the youngest ones will become low-skilled workers. As thecraftsmen retire, they will be replaced by workers who have not trained as apprentices and have noknowledge Of the traditional batch production process. These new workers will be paid half the salaryOf the previous professional craftsmen.apprentice: typically a young person betueen 15 and 25 years old, who is learning a trade or occupation.(Question 2 continued)(b)(c)(d)(i) Describe how one demographic change in Finland affects RG(ii) Identify two features Of a flow production process.Calculate for RG for one year:(i) manager’s and craftsmens’ salaries (figure X).(ii) the break-even level Of output (show all your working).(iii) the profit or loss last year (show all your working).Construct a fully labelled break-even chart for RG.Analyse the possible impacts of Anni’s proposed changes on the motivation Ofthe workers at RG[2 marks][2 marks][1 mark][2 marks][3 marks][5 marks][5 marks]

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