11-17 Relevant and irrelevant costs. Answer the following questions. 1. DeCesare Computers makes 5,200 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 5,200 units of CB76 for $260. If DeCesare buys from Peach it will be able to save $10 per unit in fixed costs but continue to incur the remaining $80 per unit. Should DeCesare accept Peach's offer? Explain. 2. LN Manufacturing is deciding whether to keep or replace an old machine. It obtains the following information: Original cost Old Machine $10,700 New Machine $9,000 Useful life Current age Remaining useful life 10 years 3 years 7 years 0 years 3 years 3 years Accumulated depreciation. $7,490 Not acquired yet Book value $3,210 Not acquired yet Current disposal value (in cash) $2,200 Not acquired yet Terminal disposal value (3 years from now) SO $0 Annual cash operating costs $17,500 $15,500 LN Manufacturing uses straight-line depreciation. Ignore the time value of money and income taxes. Should LN Manufacturing replace the old machine? Explain