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  3. question 4[9 marks]bt & w has 400 watches that

QUESTION 4[9 MARKS]BT & W has 400 watches that cost P150 each to manufacture. The...

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Accounting

QUESTION 4[9 MARKS]BT & W has 400 watches that cost P150 each to manufacture. The watches are out of fashionand cannot be sold in their current state. However, they can be redesigned at an additional cost ofP40 per watch and then sold for P180 each. Alternatively, the watches can be donated to charityfor a net financial benefit of 20% tax reduction of the original production cost.Requireda) Identify a sunk cost for BT & W (Provide a reason for your answer)(2 marks)b) Identify a relevant cost) Provide a reason for your answer)(2 marks)c) In your opinion which option should the company take? (1 mark)d) Calculate the opportunity cost associated with donating the watches (4 marks)

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