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5. Aurora Co. incurs costs of $38 per unit ($27 variable and $11 fixed) to make a product that normally sells for $56. A wholesaler
5. Aurora Co. incurs costs of $38 per unit ($27 variable and $11 fixed) to make a product that normally sells for $56. A wholesaler offers to buy 3,500 units at $36 each. This special order will result in additional shipping costs of $1.15 per unit. Assuming Aurora has adequate manufacturing capacity, what should the company do? 6. Jones Industries is considering the replacement of a piece of equipment with a newer model. The following data has been collected: Old Equipment New Equipment $150,000 Purchase price Accumulated depreciation Annual operating costs $150,000 100,000 70,000 -0- 45,000 If the old equipment is replaced now, it can be sold for $15,000. Both the old equipment's remaining useful life and the new equipment's useful life is 5 years. The company uses straight- line depreciation with a zero salvage value for all of its assets. What is the net increase or decrease in the cost of replacing the old equipment with the new equipment
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