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Question 3 10 marks Differentiate between the following 1.Management accounting and Financial accounting (6 marks) 2. Product costs and Period costs (4 marks) Question 4
Question 3 10 marks Differentiate between the following 1.Management accounting and Financial accounting (6 marks) 2. Product costs and Period costs (4 marks) Question 4 15 marks 1. Dandy Motors has been approached by a new customer with an offer to purchase 5,000 units of its hands-free, Wi-Fi-enabled automotive model-the SMART-at a price of R16, 000 per automobile. Dandy's other sales would not be affected by this new customer offer. Dandy Motors normally produces 110,000 units of its SMART model per year but only plans to produce and sell 100,000 in the coming year. The normal sales price is R30, 000 per SMART. Unit cost information for the normal level of activity is as follows: 2. Fixed overhead will not be affected by whether or not the special order is accepted. Required: 1. What are the relevant costs and benefits of the two alternatives (accept or reject the special order)? 2. By how much will operating income increase or decrease if the order is accepted
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