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QUESTION 1 PART A The decision-making approach in incremental analysis emphasized the importance of identifying and using relevant costs. 1. List and explain the two
QUESTION 1 PART A The decision-making approach in incremental analysis emphasized the importance of identifying and using relevant costs. 1. List and explain the two main characteristics of relevant cost. 2. Review the following two (2) cases below: Case 1 Music Systems Sdn Bhd manufactures speaker systems for electronic music equipment. Currently, it manufactures its own speaker. Music Systems Sdn Bhd has an alternative to purchase from external suppliers. Due to market demand, Music Systems Sdn Bhd is forecasted to manufacture an additional 20,000 units in 2022. The cost of direct labour to produce the additional 20,000 speakers is RM 100,000. Required: a) Based on the two characteristics identified in Question 1 (Part A - 1), is the RM 100,000 relevant cost? Explain your answer. Case 2 Music Systems Sdn Bhd uses a large power saw to cut the wood that forms the housing for the speakers. The power saw was purchased three (3) years ago and is being depreciated at an annual rate of RM 25,000 per year. Required: b) Base on the two characteristics identified in Question 1 (Part A - 1), is the RM 25,000 relevant cost? Explain your
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