Check my work Benson Bicycle Manufacturing Company currently produces the handlebars used in manufacturing its bicycles, which are high-quality racing bikes with limited sales. Benson produces and sells only 6,600 bikes each year. Due to the low volume of activity, Benson is unable to obtain the economies of scale that larger producers achieve. For example, Benson could buy the handlebars for $29 each they cost $32 each to make. The following is a detailed breakdown of current production costs: SOTTO $14 Unit-level costs Materials Labor Overhead Allocated facility-level coats Total $ 92,400 59,400 19,800 39.600 $211,200 After seeing these figures, Benson's president remarked that it would be foolish for the company to continue to produce the handlebars at $32 each when it can buy them for $29 each. Required Calculate the total relevant cost. Do you agree with the president's conclusion? Per Unit T otal Total relevant cost Do you agree with the president's conclusion? to search 2 A0440 Exercise 13-14 Segment elimination decision LO 13-4 Munoz Company operates three segments. Income statements for the segments imply that profitability could be improved if Segment A were eliminated. MUNOZ COMPANY Income Statements for the Year 2018 Cost of goods sold Sales commissions Contribution margin General fixed operating expenses (allocation of president's salary) Advertising expense tapecific to individual divisions) Net income $ 165,000 210,000 (123,000) (03,000) (18,000) (21,000) 24,000 141,000 (38,000) (32,000). (5,000) (16.000) $ (19,000) $ 93,000 $261,000 (77.000) (27,000) 157.000 (41,000) $116,000 Required a. Prepare a schedule of relevant sales and costs for Segment A b. Prepare comparative income statements for the company as a whole under two alternatives: (1) the retention of Segment A and (2) the elimination of Segment A. Complete this question by entering your answers in the tabs below. D44 search hp Complete this question by entering your answers in the tabs below. Required A Required B Prepare a schedule of relevant sales and costs for Segment A. Relevant Rev. and Cost items for Segment A Effect on income Required B > Prev 5 of 7 Next > co search Check my work Complete this question by entering your answers in the tabs below. Required A Required B Prepare comparative income statements for the company as a whole under two alternatives: (1) the retention of Segment A and (2) the elimination of Segment A. MUNOZ COMPANY Comparative Income Statements for the Year 2018 Decision Keep Seg. A Eliminate Seg. A Sales Cost of goods sold Sales commissions Contribution margin General fixed operating expenses Advertising expense Net Income AD 40 9:24A 4/3/20 Search hp Check my work Exercise 13-17 Asset replacement--opportunity cost LO 13-5 Finch Freight Company owns a truck that cost $34,000. Currently, the truck's book value is $29,000, and its expected remaining useful life is five years. Finch has the opportunity to purchase for $21,000 a replacement truck that is extremely fuel efficient. Fuel cost for the old truck is expected to be $5,900 per year more than fuel cost for the new truck. The old truck is paid for but, in spite of being in good condition, can be sold for only $10,000. Required Calculate the total relevant costs. Should Finch replace the old truck with the new fuel-efficient model, or should it continue to use the old truck until it wears out? Keep Old Replace With Total relevant costs Should Finch replace or continue with the old truck? AD4428 search WD Exercise 13-18 Asset replacement decision LO 13-5 A machine purchased three years ago for $318,000 has a current book value using straight-line depreciation of $190,000; its operating expenses are $40,000 per year. A replacement machine would cost $231,000, have a useful life of ten years, and would require $8,000 per year in operating expenses. It has an expected salvage value of $71,000 after ten years. The current disposal value of the old machine is $79,000, if it is kept 10 more years, its residual value would be $11,000. Required Calculate the total costs in keeping the old machine and purchasing a new machine. Should the old machine be replaced? Keep Old Machine Purchase New Machine Total costs Should the old machine be replaced?