Answered step by step
Verified Expert Solution
Question
00
1 Approved Answer
Please do every requirement, thanks Answer the following questions. 1. Damico Computers makes 5,800 units of a circuit board, CB76 at a cost of $230
Please do every requirement, thanks
Answer the following questions. 1. Damico Computers makes 5,800 units of a circuit board, CB76 at a cost of $230 each. Variable cost per unit is $180 and fixed cost per unit is $50. Peach Electronics offers to supply 5,800 units of CB76 for $210. If Damico buys from Peach it will be able to save $20 per unit in fixed costs but continue to incur the remaining $30 per unit. Should Damico accept Peach's offer? Explain. 2. LN Manufacturing is deciding whether to keep or replace an old machine. It obtains the following information: (Click the icon to view the information.) LN Manufacturing uses straight-line depreciation. Ignore the time value of money and income taxes. Should LN Manufacturing replace the old machine? Explain. 1. Damico Computers makes 5,800 units of a circuit board, CB76 at a cost of $230 each. Variable cost per unit is $180 and fixed cost per unit is $50. Peach Electronics offers to supply 5,800 units of CB76 for $210. If Damico buys from Peach it will be able to save $20 per unit in fixed costs but continue to incur the remaining $30 per unit. Should Damico 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.) Make Buy Relevant costs: i Data Table Unit relevant cost Old Machine New Machine Original cost $ 10,500 $ 8,600 Useful life 12 years 3 years Current age 9 years O years Remaining useful life 3 years 3 years Accumulated depreciation $ 7,875 Not acquired yet Book value $ 2,625 Not acquired yet Current disposal value (in cash) $ 2,500 Not acquired yet Terminal disposal value (3 years from now) $ 0 $ 0 Annual cash operating costs $ 18,000 $ 13,500 Print DoneStep 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