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A. Groot Sdn. Bhd. is considering two alternatives, code-named X and Y. Costs associated with the altematives are listed below: Required: a. Based on the

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A. Groot Sdn. Bhd. is considering two alternatives, code-named X and Y. Costs associated with the altematives are listed below: Required: a. Based on the table above, determine which cost are relevant or not relevant in the choice between these two alternatives. (4marks) b. Calculate the differcntial cost between the two alternatives. (4 marks) c. State which of the following costs are relevant or irrelevant in making a decision. i. Avoidable cost nisures ii. Unavoidable cost wriekin-1 ii. Sunk cost wetwint iv. Opportunity cost (4 marks) B. Part F77 is used in one of Nifler Sdn. Bhd. products. The company's accounting department reports the following costs of producing the 7,000 units of the part that are needed every year. An outside supplier has offered to make the part and sell it to the company for RM28.30 each. If this offer is accepted, the supervisor's salary and all of the variable costs, including direct labor, can be avoided. The special equipment used to make the part was purchased many years ago and has no salvage value or other use. The allocated general overhead represents fixed costs of the entire company. If the outside supplier's offer were accepted, only RM9,000 of these allocated general overhead costs would be avoided. Prepare a report that shows the effect on the company's total net operating income of buying part F77 from the supplier rather than continuing to make it inside the company. (11 marks) Which alternative should the company choose? (2 marks)

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