Answer the following questions.1. Douglas Computers makes 5,900 units of a circuit board, CB76 at a cost of $220 each. Variable cost per unit is $170 and fixed cost per unit is $50. PeachElectronics offers to supply 5,900 units of CB76 for $200. If Douglas buys from Peach it will be able to save $20 per unit in fixed costs but continue to incur theremaining $30 per unit. Should Douglas accept Peach's offer? Explain.1. Douglas Computers makes 5,900 units of a circuit board, CB76 at a cost of $220 each. Variable cost per unit is $170 and fixed cost per unit is $50. PeachElectronics offers to supply 5,900 units of CB76 for $200. If Douglas buys from Peach it will be able to save $20 per unit in fixed costs but continue to incur theremaining $30 per unit. Should Douglas accept Peach's offer? 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.)MakeBuyRelevant costs:Unit relevant costDouglas Computers shouldPeach's offer. When comparing relevant costs between the choices, Peach's offer price isthan the cost to continue toproduce.

Relevant Cost: Relevant cost is the avoidable cost which is incurred at the time of the decision…

Answered: CB76 at a cost of $220 each. Variable…

Business

Accounting

CB76 at a cost of $220 each. Variable cost If Douglas buys from Peach it will be able t ffer? Explain.

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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Capital Gain

Any capital asset when sold can give the seller a higher or lower price from its purchase price leading to a capital gain or capital loss. The time period of holding an asset is decided based on if it is a long term or short-term capital gain. On that basis, the rate of taxation is decided if it is 20%, 15% or according to the tax brackets. The rate of taxation differs in the case of equity or debt, whether long or short term. The capital gain can be adjusted from capital loss to arrive at a net capital gain. The amount of gains and the exemption has to be reported in the tax return filed in the financial year in which the asset was transferred. The tax return can be filed quarterly, monthly, semi-annually or annually.

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