Cost Accounting
Cost Accounting
15th Edition
ISBN: 9780133428834
Author: Horngren
Publisher: PEARSON
Question
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Chapter 11, Problem 11.21E

1.

To determine

Opportunity cost of interest

Given information:

2014,

Total number of units required in the year is 204,000.

Number on months in a year is 12.

Numbers of units required in a month is 17,000.

Rate of investment is 10%.

2.

To determine

To identify: Opportunity cost should be recorded in the accounting system or not.

3.

To determine

Company should purchase 204,000 units at the start of the year 2014 or 17,000 units each month.

4.

To determine

factor that should be considered at the time of decision making.

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