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Transcription of this question: 2.Woolman Windows (WW)Woolman Windows (WW) manufactures windows for houses. The windows are sold to suppliers Ofbuilding materials in Canada. WWS windows have two pieces Of glass sealed in a wooden framewith a special glue that prevents any air from passing through. The windows are energy-efficient.In addition, moisture never appears between the two pieces Of glass, a problem common to manyOther energy-efficient windows. The WWbrand is widely recognized in the residential constructionindustry in Canada _Because Of the housing crisis in North America, WW has seen its sales fall and its financial positiondeteriorate.Table 1: selected items from WWS balance sheet as at 31 May 2009 (all figures in S thousands).CashCreditorsDebtorsLoan ca italShort-term borrowingRetained profitShare italStockTotal (net fixed assets)150515850x28513003004001800Table 2: selected items from WWS profit and loss account for the year ended 31 May 2009 (all figuresin S thousands).Cost of ods soldEx ensesGross profitSales revenue4700215021956895[C International Baccalaureate Organization, 2013]WWmanufactures only standard-sized windows using flow production. WW0fTers trade credit* withpayment in 30 days. However, WW is considering taking “special orders”, that is, to manufacturewindows that are not standard-sized. Doing so might be profitable if the number Of windowsper special order were a minimum Of 100 windows (break-even point). WW would manufacturespecial orders using batch production. For special orders, the buyer would pay 50% uponplacing the order and the remainder upon delivery. The disadvantage is that an additional employeewould have to be employed to plan the production process for each special order. WW is uncertainif special-order sales will be sufficient to cover the cost Of the recruitment and training Of thenew employee.(Question 2 continued)(a)(b)(c)Define the following terms:(i)(ii)(i)(ii)(iii)(iv)(v)share capitalbatch production.Using the information in Table 1, construct a balance sheet for WW as at31 May 2009 and calculate the loan capital (figure X).Using relevant information from Table 1, calculate the acid test (quick)ratio (show all your working).Using relevant information from Table 1, calculate the gearing ratio.Using the information in Table 2, calculate the net profit before interestand tax (show all your working).Using relevant information from Table 2, calculate the gross profit margin.Using financial and non-financial information, examine WWS decision to startproducing special-order windows.[2 marks][2 marks][5 marks][2 marks][l mark][2 marks][l mark][5 marks]

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