Question: Question 3: (10 marks) (C3,D3) Part A: (4 marks) Ahlia Computers makes 5,200 units of a circuit board, CB76, at a cost of $280 each.
Question 3: (10 marks) (C3,D3) Part A: (4 marks) Ahlia Computers makes 5,200 units of a circuit board, CB76, at a cost of $280 each. Variable cost per unit is $190 and fixed cost per unit is $90. Zain Electronics offers to supply 5,200 units of CB76 for $260. If Ahlia buys from Zain, it will be able to save $10 per unit in fixed costs but continue to incur the remaining $80 per unit. Should Ahlia accept Zain 's offer? Explain. Part B: (6 marks) Bahrain Manufacturing is deciding whether to keep or replace an old machine. It obtains the following information: Bahrain Manufacturing uses straight-line depreciation. Ignore the time value of money and income taxes. Should Bahrain Manufacturing replace the old machine? Explain. Question 3: (10 marks) (C3,D3) Part A: (4 marks) Ahlia Computers makes 5,200 units of a circuit board, CB76, at a cost of $280 each. Variable cost per unit is $190 and fixed cost per unit is $90. Zain Electronics offers to supply 5,200 units of CB76 for $260. If Ahlia buys from Zain, it will be able to save $10 per unit in fixed costs but continue to incur the remaining $80 per unit. Should Ahlia accept Zain 's offer? Explain. Part B: (6 marks) Bahrain Manufacturing is deciding whether to keep or replace an old machine. It obtains the following information: Bahrain Manufacturing uses straight-line depreciation. Ignore the time value of money and income taxes. Should Bahrain Manufacturing replace the old machine? Explain
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