Answer the following questions.1. Dalton Computers makes 5,500 units of a circuit board, CB76 at a cost of $250 each. Variable cost per unit is $170 and fixed cost per unit is $80. Peach Electronics offers to supply 5,500 units of CB76 for$230. If Dalton buys from Peach it will be able to save $15 per unit in fixed costs but continue to incur the remaining $65 per unit. Should Dalton accept Peach's offer? Explain.2. TX Manufacturing is deciding whether to keep or replace an old machine. It obtains the following information:(Click the icon to view the information.)TX Manufacturing uses straight-line depreciation. Ignore the time value of money and income taxes. Should TX Manufacturing replace the old machine? Explain.Relevant COSIS.Variable costs per unitAvoidable fixed costs per unitPurchase price per unitUnit relevant costCash operating costsCurrent disposal value of old machineCost of new machine$Total relevant costs17015$185 $230230Dalton Computers should reject Peach's offer. When comparing relevant costs between the choices, Peach's offer price is higher than the cost to continue to produce.2. TX Manufacturing is deciding whether to keep or replace an old machine. TX Manufacturing uses straight-line depreciation. Ignore the time value of money and income taxes. Should TX Manufacturingreplace the old machine? Explain.Begin by calculating the total relevant costs. (If an input field is not used in the table, leave the input field empty; do not enter a zero. Use parentheses or a minus sign for numbers to be subtracted.)DifferenceKeepReplaceC---

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FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Answer the following questions. 1. Douglas Computers makes 5,900 units of a circuit board, CB76 at a cost of $220 each. Variable cost per unit is $170 and fixed cost per unit is $50. Peach Electronics offers to supply 5,900 units of CB76 for $200. If Douglas buys from Peach it will be able to save $20 per unit in fixed costs but continue to incur the remaining $30 per unit. Should Douglas accept Peach's offer? Explain. 1. Douglas Computers makes 5,900 units of a circuit board, CB76 at a cost of $220 each. Variable cost per unit is $170 and fixed cost per unit is $50. Peach Electronics offers to supply 5,900 units of CB76 for $200. If Douglas buys from Peach it will be able to save $20 per unit in fixed costs but continue to incur the remaining $30 per unit. Should Douglas accept Peach's offer? Explain. Begin by calculating the relevant cost per unit. (If a box is not used in the table, leave the box empty; do not enter a zero.) Make Buy Relevant costs: Unit relevant cost Douglas…
Robinson Computers makes 5,700 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 5,700 units of CB76 for $210. If Robinson buys from Peach, it will be able to save $20 per unit in fixed costs but continue to incur the remaining $30 per unit. Should Robinson accept Peach’s offer? Explain.
DeCesare Computers makes 5000 units of a circuit board, CB76 at a cost of $280 each. Variable cost per unit is $170 and fixed cost per unit is $110. Peach Electronics offers to supply 5000 units of CB76 for $260. If buys from Peach it will be able to save $15 per unit in fixed costs but continue to incur the remaining $95 per unit. Should DeCesare accept Peach's offer? Explain. TX Manufacturing is deciding whether to keep or replace an old machine. It obtains the following information: Old Machine New Machine Original cost $10,400 $9,200 Useful life 13 years 3 years Current age 10 years 0 years Remaining useful life 3 years 3 years Accumulated depreciation $8,000 Not acquired yet Book value $2,400 Not acquired yet Current disposal value (in cash) $2,000 Not acquired yet Terminal disposal value (3 years from now) $0…
Vista Company manufactures electronic equipment. It currently purchases the special switches used in each of its products from an outside supplier. The supplier charges Vista $5.50 per switch. Vista's CEO is considering purchasing either machine A or machine B so the company can manufacture its own switches. The projected data are as follows: Annual fixed costs Variable cost per switch Machine A $632,400 1.78 Required: 1. For each machine, what is the minimum number of switches that Vista must make annually for total costs to equal outside purchase cost? 2. What volume level would produce the same total costs regardless of the machine purchased? 3. What is the most profitable alternative for producing 235,000 switches per year and what is the total cost of that alternative? Required 1 Required 2 Required 3 Complete this question by entering your answers in the tabs below. Machine B $ 860,100 0.80 Minimum number of switches For each machine, what is the minimum number of switches that…
Robinson Computers makes 5,700 units of a circuit board, CB76, unit is $180 and fixed cost per unit is $50. Peach Electronics offers to supply 5,700 units of CB76 for $210. If Robinson buys from Peach, it will be able to save $20 per unit in fixed costs but continue to incur the remaining $30 per unit. Should Robinson accept Peach's offer? Explain. RT Manufacturing is deciding whether to keep or replace an old machine. It obtains the following information: Old Machine New Machine $10,800 $8,800 Original cost Useful life 9 years 5 years Current age 4 years O years 5 years 5 years Remaining useful life Accumulated depreciation Not acquired yet Not acquired yet Not acquired yet Oales $4,800 Book value $6,000 $2,800 Current disposal value (in cash) Terminal disposal value (5 years from now) SO $0
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