Answer the following questions. 1. Dickinson Computers makes 5,000 units of a circuit board, CB76 at a cost of $200 each. Variable cost per unit is $160 and fixed cost per unit is $40. Peach Electronics offers to supply 5,000 units of CB76 for $180. If Dickinson buys from Peach it will be able to save $25 per unit in fixed costs but continue to incur the remaining $15 per unit. Should Dickinson accept Peach's offer? Explain. $15 per unit. Snouia Dickinson accept reacn's ofer? Explain. Begin by calculating the relevant cost per unit. (If a box is not used in the table, leave the box empty; do not enter a zero.) Relevant costs: Unit relevant cost Dickinson Computers should Peach's offer price is **** Make Buy Peach's offer. When comparing relevant costs between the choices, than the cost to continue to produce.
Answer the following questions. 1. Dickinson Computers makes 5,000 units of a circuit board, CB76 at a cost of $200 each. Variable cost per unit is $160 and fixed cost per unit is $40. Peach Electronics offers to supply 5,000 units of CB76 for $180. If Dickinson buys from Peach it will be able to save $25 per unit in fixed costs but continue to incur the remaining $15 per unit. Should Dickinson accept Peach's offer? Explain. $15 per unit. Snouia Dickinson accept reacn's ofer? Explain. Begin by calculating the relevant cost per unit. (If a box is not used in the table, leave the box empty; do not enter a zero.) Relevant costs: Unit relevant cost Dickinson Computers should Peach's offer price is **** Make Buy Peach's offer. When comparing relevant costs between the choices, than the cost to continue to produce.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Answer the following questions.
1. Dickinson Computers makes 5,000 units of a circuit board, CB76 at a cost of $200 each. Variable cost per unit
is $160 and fixed cost per unit is $40. Peach Electronics offers to supply 5,000 units of CB76 for $180. If
Dickinson buys from Peach it will be able to save $25 per unit in fixed costs but continue to incur the
remaining $15 per unit. Should Dickinson accept Peach's offer? Explain.
$15 per unit. Snovia Dickinson accept reacn's ofer? Explain.
Begin by calculating the relevant cost per unit. (If a box is not used in the table, leave the box empty; do not enter
a zero.)
Relevant costs:
Unit relevant cost
Dickinson Computers should
Peach's offer price is
www.
Make
Buy
Peach's offer. When comparing relevant costs between the choices,
than the cost to continue to produce.
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