11.37 Selection of a costing system to support financial reporting and decision making LO3, 5 Talk2Me Communications manufactures headsets to make phones hands free. In 2020, the entity produced 30 000 units, of which 24 000 were sold. The following costs were recorded for 2020. Direct material Direct labour Manufacturing overhead Selling expenses Administrative expenses $1200000 600 000 1500 000 150000 240000 Determination of the inventoriable product cost for Talk2Me Communications is relatively simple, as the entity produces only one product. Required (a) Identify the most appropriate costing system to value products for Talk2Me Communications' financial statements. (b) Calculate the inventoriable product cost. (c) Comment on the usefulness of the inventoriable product cost for decision making. 12.25 Making an investment decision between two projects *LO3, 5 The Flametree Company has two independent projects it could invest in. The financial operations manager has completed some analysis and presented the information to the board. The board has asked you for advice. The entity uses a PP criterion of not accepting any project that takes more than 7 years to recover costs. Investment required ($'000) Life of project (years) PP (years) NPV ($'000) Project 23 Project 24 400 800 10 272 20 15 11 40 40 Required (a) Are both projects acceptable to the entity? (b) If the entity had a history of conservatism in its financial decision making, which project would you advise? (c) Which project would you advise after taking only these decision-support tools into considera- tion? Why?