1a. 1b.

Vaughn's Manufacturing Company can make 100 units of a necessary component part with the following costs: If Vaughn's Manufacturing Company can purchase the component externally for $205000 and only $4000 of the fixed costs can be avoided, what is the correct make-or-buy decision? Buy and save $16000 Make and save $16000 Make and save $2000 Buy and save $2000 Crane Company is contemplating the replacement of an old machine with a new one. The following information has been gathered: If the old machine is replaced, it can be sold for $27200. The company uses straight-line depreciation with a zero salvage value for all of its assets. Which of the following amounts is relevant to the replacement decision? $340000$102000$27200$68000