ACCT20076 Bohora 12126306 - Word rajpschhetri Layout References Review Mailings View Help gn Grammarly Tell me what you want to do V12 AaBbCcL AaBb AaBbcc AaBbCel AaBbC AaBb C Emphasis T Heading 1 T Heading 2 1 Heading 3 T Heading 4 1 Heading 6 Fin abc Rep A Sele U-x x x A . y . A. === Edit Font Paragraph Styles 224151617181910 10 111 112 113 114 115 1 13 14 15 16 17 18 wich I LUL 10., 1, (8,25,000) Marketing cost (8.25.000) 99 32.500 Operating Income 93,00,000 (12 marks) 10 Marks Question 3 Best Trim, a manufacturer of lawn mowers, predicts that it will purchase 204,000 spark plugs next year Best Trim estimates that 17.000 spark plugs will be required each month A supplier quotes a price of $9 per spark plug. The supplier also offers a special discount option. If all 204,000 spark plugs are purchased at the start of the year, a discount of 2% off the $9 price will be given. Best Trim can invest ils cash at 10% per year. It costs Best Trim $260 to place each purchase order Question 3 continued over next page Question 3 continued Required a) What is the opportunity cost of interest forgone from purchasing all 204,000 units at the start of the year instead of in 12 monthly purchases of 17.000 units per order? English Australia ACCT20076_Bohora_12126306 - Word Table Tools rajpsc References Mailings Review View Help Grammarly Design Layout Tell me what you want to do A A Aa ... 21 x x A. ay.A AaBbCcL AaBb AaBbCc AaBbCc AaBBC AaBBC Emphasis 1 Heading 1 T Heading 2 1 Heading 3 T Heading 4 T Heading 6 Font Paragraph Styles 21.11.23.1.46.178.D 10 11 12 13 14 15 16 17 18 Fal....ppt you www.puppy. wwwuppuu wwwww discount option: If all 204,000 spark plugs are purchased at the start of the year, a discount of 2% off the $9 price will be given Best Trim can invest its cash at 10% per year. It costs Best Trim $260 to place each purchase order Question 3 continued over next page Question 3 continued Required a) What is the opportunity cost of interest forgone from purchasing all 204,000 units at the start of the year instead of in 12 monthly purchases of 17.000 units per order? Page 8 of 13 Table Tools CCT20076_Bohora_12126306 - Word ances Mailings Review View Help Grammarly Design Layout Tell me what you want to do A Aa E... ALI - aty - A cL Emphasis T Heading 1 T Heading 2 T Heading 3 1 Heading 4 T Headi Paragraph 1.1.1.2.1.3.1.4.1.6.1.7.1.8.1.110 111 112 Styles 13 114 115 116 117 118 1.2.1 Foundations of Management Accounting - ACC T20076 I= (2 marks) b) Would this opportunity cost be recorded in the accounting system? Why or why not? (2 marks) Question 3 continued over next page