Answer the following questions. 1. Douglas Computers makes 5,100 units of a circuit board, CB76 at a cost of $280 each. Variable cost per unit is $190 and fixed cost per unit is $90. Peach Electronics offers to supply 5,100 units of CB76 for $260. If Douglas buys from Peach it will be able to save $20 per unit in fixed costs but continue to incur the remaining $70 per unit. Should Douglas accept Peach's offer? Explain. 2. RT Manufacturing is deciding whether to keep or replace an old machine. It obtains the following information: (Click the icon to view the information.) RT Manufacturing uses straight-line depreciation. Ignore the time value of money and income taxes. Should RT Manufacturing replace the old machine? Explain. Relevant LUSIS. Variable costs per unit Avoidable fixed costs per unit Purchase price per unit Unit relevant cost $ Total relevant costs 190 20 $ 210 $ 260 260 Douglas Computers should reject Peach's offer. When comparing relevant costs between the choices, Peach's offer price is higher than the cost to continue to produce. 2. RT Manufacturing is deciding whether to keep or replace an old machine. RT Manufacturing uses straight-line depreciation. Ignore the time value of money and income taxes. Should RT Manufacturing replace the old machine? Explain. Begin by calculating the total relevant costs. (If an input field is not used in the table, leave the input field empty; do not enter a zero. Use parentheses or a minus sign for numbers to be subtracted.) Difference Keep Replace
Answer the following questions. 1. Douglas Computers makes 5,100 units of a circuit board, CB76 at a cost of $280 each. Variable cost per unit is $190 and fixed cost per unit is $90. Peach Electronics offers to supply 5,100 units of CB76 for $260. If Douglas buys from Peach it will be able to save $20 per unit in fixed costs but continue to incur the remaining $70 per unit. Should Douglas accept Peach's offer? Explain. 2. RT Manufacturing is deciding whether to keep or replace an old machine. It obtains the following information: (Click the icon to view the information.) RT Manufacturing uses straight-line depreciation. Ignore the time value of money and income taxes. Should RT Manufacturing replace the old machine? Explain. Relevant LUSIS. Variable costs per unit Avoidable fixed costs per unit Purchase price per unit Unit relevant cost $ Total relevant costs 190 20 $ 210 $ 260 260 Douglas Computers should reject Peach's offer. When comparing relevant costs between the choices, Peach's offer price is higher than the cost to continue to produce. 2. RT Manufacturing is deciding whether to keep or replace an old machine. RT Manufacturing uses straight-line depreciation. Ignore the time value of money and income taxes. Should RT Manufacturing replace the old machine? Explain. Begin by calculating the total relevant costs. (If an input field is not used in the table, leave the input field empty; do not enter a zero. Use parentheses or a minus sign for numbers to be subtracted.) Difference Keep Replace
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
I need help with requirement 2 please.
Transcribed Image Text:Data table
Old Machine New Machine
$ 10,300 $
10 years
6 years
4 years
6,180
4,120
2,300
0
16,500
Original cost
Useful life
Current age
Remaining useful life
Accumulated depreciation
$
Book value
$
Current disposal value (in cash)
$
Terminal disposal value (4 years from now) $
Annual cash operating costs
$
Print
Done
8,800
4 years
0 years
4 years
Not acquired yet
Not acquired yet
Not acquired yet
$
0
$
15,500
-
X
Transcribed Image Text:Answer the following questions.
1. Douglas Computers makes 5,100 units of a circuit board, CB76 at a cost of $280 each. Variable cost per unit is $190 and fixed cost per unit is $90. Peach Electronics offers to supply 5,100 units of CB76 for
$260. If Douglas buys from Peach it will be able to save $20 per unit in fixed costs but continue to incur the remaining $70 per unit. Should Douglas accept Peach's offer? Explain.
2. RT Manufacturing is deciding whether to keep or replace an old machine. It obtains the following information:
(Click the icon to view the information.)
RT Manufacturing uses straight-line depreciation. Ignore the time value of money and income taxes. Should RT Manufacturing replace the old machine? Explain.
Relevant CUSIS
Variable costs per unit
Avoidable fixed costs per unit
Purchase price per unit
Unit relevant cost
$
Total relevant costs
190
20
$
$ 210 $
260
260
C...
Douglas Computers should reject Peach's offer. When comparing relevant costs between the choices, Peach's offer price is higher than the cost to continue to produce.
2. RT Manufacturing is deciding whether to keep or replace an old machine. RT Manufacturing uses straight-line depreciation. Ignore the time value of money and income taxes. Should RT Manufacturing
replace the old machine? Explain.
Begin by calculating the total relevant costs. (If an input field is not used in the table, leave the input field empty; do not enter a zero. Use parentheses or a minus sign for numbers to be subtracted.)
Keep Replace Difference
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