$1.$

DavanitDavanit

Computers makes

$5$ comma $6005,600$

units of a circuit$$ board, CB$76$ at a cost of

$ $200$$$200$

each. Variable cost per unit is

$ $160$$$160$

and fixed cost per unit is

$ $40$$$40.$

Peach Electronics offers to supply

$5$ comma $6005,600$

units of CB$76$ for

$ $180$$$180.$

If

DavanitDavanit

buys from Peach it will be able to save

$ $15$$$15$

per unit in fixed costs but continue to incur the remaining

$ $25$$$25$

per unit. Should

DavanitDavanit

accept$$ Peach's offer? Explain.

$2.$

LFLF

Manufacturing is deciding whether to keep or replace an old machine. It obtains the following$$ information: