The Telephone Co (T Co) is a company specialising in the provision of telephone systems for commercial clients. T Co has been approached by a potential customer, Push Co, which wants to install a telephone system in new offices it is opening. While the job is not a particularly large one, T Co is hopeful of future business in the form of replacement systems and support contracts for Push Co. T Co is therefore keen to quote a competitive price for the job. The following information should be considered: (i) One of the company's salesmen has already been to visit Push Co, to give them a demonstration of the new system, together with a complimentary lunch, the costs of which totalled $400. (ii) The installation is expected to take one week to complete and would require three engineers, each of whom is paid a monthly salary of $4,000. The engineers have just had their annually renewable contract renewed with T Co. One of the three engineers has spare capacity to complete the work, but the other two would have to be moved from Contract X in order to complete this one. Contract X generates a contribution of $200 per engineer per week. There are no other engineers available to continue with Contract X if these two engineers are taken off the job. It would mean that T Co would miss its contractual completion deadline on Contract X by one week. As a result, T Co would have to pay a one-off penalty of $500. Since there is no other work scheduled for their engineers in one week's time, it will not be a problem for them to complete Contract X at this point. (iii) 120 telephone handsets would need to be supplied to Push Co. The current cost of these is $18.20 each,although T Co already has 80 handsets in inventory. These were bought at a price of $16.80 each. The handsets are the most popular model on the market and are frequently requested by T Co's customers. (iv) Push Co would also need a computerised control system called 'Swipe 2'. The current market price of Swipe 2 is $10,800, although T Co has an older version of the system, 'Swipe 1', in inventory, which could be modified at a cost of $4,600. T Co paid $5,400 for Swipe 1 when it ordered it in error two months ago and has no other use for it. The urrent market price of Swipe 1 is $5,450, although if T Co tried to selll the one it has, it would be deemed to be 'used' and therefore only worth $3,000.