(b) Chichi is unsure whether she should use her own car or rent a car to go on anextended cross-country trip for two (2) weeks during the mid-term break. Explainand identify which of the above costs are relevant and which are irrelevant in herdecision. Chichi purchased a used Honda CRV for RM8,000 at the beginning of last year andincurred the following operating costs:B.RM 1,600RM 1,200Depreciation (RM8,000/ 5 years)InsuranceParking space feeRoad tax and licenseRM 36040RMVariable operating costRM 0.14 per kmThe variable operating cost consists of petrol, oil, tyres, maintenance and repairs. Chichiestimates that, at her current rate of usage, the car will have zero resale value in five (5)years, so the annual straight-line depreciation is RMI,600. Chichi pay the parking spacefor a monthly fee.

Cost Accounting: It is the process of collecting, recording, analyzing the cost, summarizing cost,…

(b) Chichi is unsure whether she should use her own car or rent a car to go on an extended cross-country trip for two (2) weeks during the mid-term break. Explain and identify which of the above costs are relevant and which are irrelevant in her decision.

(b) Chichi is unsure whether she should use her own car or rent a car to go on an extended cross-country trip for two (2) weeks during the mid-term break. Explain and identify which of the above costs are relevant and which are irrelevant in her decision.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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