Question
Answer the following questions. 1. Davanit Computers makes 5,600 units of a circuit board, CB76 at a cost of $200 each. Variable cost per
Answer the following questions. 1. Davanit Computers makes 5,600 units of a circuit board, CB76 at a cost of $200 each. Variable cost per unit is $160 and fixed cost per unit is $40. Peach Electronics offers to supply 5,600 units of CB76 for $180. If Davanit buys from Peach it will be able to save $15 per unit in fixed costs but continue to incur the remaining $25 per unit. Should Davanit accept Peach's offer? Explain. 2. LF Manufacturing is deciding whether to keep or replace an old machine. It obtains the following information: Click the icon to view the information.) LF Manufacturing uses straight-line depreciation. Ignore the time value of money and income taxes. Should LF Manufacturing replace the old machine? Explain. 1. Davanit Computers makes 5,600 units of a circuit board, CB76 at a cost of $200 each. Variable cost per unit is $160 and fixed cost per unit is $40. Peach Electronics offers to supply 5,600 units of CB76 for $180. If Davanit buys from Peach it will be able to save $15 per unit in fixed costs but continue to incur the remaining $25 per unit. Should Davanit accept Peach's offer? Explain. Begin by calculating the relevant cost per unit. (If an input field is not used in the table, leave the input field empty; do not enter a zero.) Relevant costs: Unit relevant cost Make Buy
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access with AI-Powered Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started