Question

Answer the following questions.
REQUIRED
1. Dalton Computers makes 5,000 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 5,000 units of CB76 for $210. If Dalton buys from Peach it will be able to save $20 per unit of fixed costs but continues to incur the remaining $30 per unit. Should Dalton accept Peach’s offer? Explain.
2. AP Manufacturing is deciding whether to keep or replace an old machine. It obtains the following information:
AP Manufacturing uses straight-line amortization. Ignore the time value of money and income taxes. Should AP replace the old machine? Explain.


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  • CreatedJuly 31, 2015
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