Answer the following questions.
Required
1. Ewing 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. HT Electronics offers to supply 5,000 units of CB76 for $210. If Ewing buys from HT it will be able to save $20 per unit of fixed costs but continues to incur the remaining $30 per unit. Should Ewing accept HT'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.

Old Machine $10,000 10 years 6 years 4 years $6,000 $4,000 2,500 New Machine Original cost Useful life Current age Remaining useful life Accumulated amortization Book value Current disposal value (in cash) Terminal disposal value (4 years from now) Annual cash operating costs S8,000 4 years 0 years 4 years Not acquired yet Not acquired yet Not acquired yet SO $12,000 S0 $20,000