Required 1. Dowling Computers makes 5,200 units of a circuit board, CB76, at a cost of $200 each. Variable cost per unit is $150 and fixed cost per unit is $50. HT Electronics offers to supply 5,200 units of CB76 for $185. If Dowling buys from HT it will be able to save $15 per unit of fixed costs but continue to incur the remaining $35 per unit. Should Dowling accept HT's offer? Explain. 2. RT Manufacturing is deciding whether to keep or replace an old machine. It obtains the following information: E: (Click the icon to view the information.) RT Manufacturing uses straight-line amortization. Ignore the time value of money and income taxes. Should RT replace the old machine? Explain. Requirement 1. Dowling Computers makes 5,200 units of a circuit board, CB76, at a cost of $200 each. Variable cost per unit is $150 and fixed cost per unit is $50. HT Electronics offers to supply 5,200 units of CB76 for $185. If Dowling buys from HT it will be able to save $15 per unit of fixed costs but continue to incur the remaining $35 per unit. Should Dowling accept HT's offer? Explain. Begin by calculating the relevant cost per unit. (Only complete the necessary answer boxes.) Make Buy 's 150 Relevant costs: Variable costs per unit Avoidable fixed costs per unit Purchase price per unit $ 185 $ 165 $ 185 Unit relevant cost Dowling Computers should reject HT's offer. When comparing relevant costs between the choices, HT's offer price is higher than the cost to continue to produce. i Data Table - X Old Machine New Machine Original cost Useful life $ 9 Current age Remaining useful life Accumulated amortization $ $ 10,800 years years years 4,800 6,000 2,900 0 18,500 $ 8,200 5 years 0 years 5 years Not acquired yet Not acquired yet Not acquired yet $ 0 $ 15,500 Book value $ Current disposal value in cash) Terminal disposal value (4 years from now) Annual cash operating costs $ $ Print Done Requirement 2. RT Manufacturing uses straight-line amortization. Ignore the time value of money and income taxes. Should RT replace the old machine? Explain. Begin by calculating the total relevant costs. (Only complete the necessary answer boxes. Use parentheses or a minus sign for numbers to be subtracted.) Keep Replace Difference Total relevant costs