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Answer the following questions. 1. Douglas Computers makes 5,100 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. Peach Electronics offers to supply 5,100 units of CB76 for $260. If Douglas buys from Peach it will be able to save $20 per unit in fixed costs but continue to incur the remaining $70 per unit. Should Douglas accept Peach's offer? Explain. 2. RT Manufacturing is deciding whether to keep or replace an old machine. It obtains the following information: (Click the icon to view the information.) RT Manufacturing uses straight-line depreciation. Ignore the time value of money and income taxes. Should RT Manufacturing replace the old machine? Explain. Relevant LUSIS. Variable costs per unit Avoidable fixed costs per unit Purchase price per unit Unit relevant cost $ Total relevant costs 190 20 $ 210 $ 260 260 Douglas 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. RT Manufacturing is deciding whether to keep or replace an old machine. RT Manufacturing uses straight-line depreciation. Ignore the time value of money and income taxes. Should RT Manufacturing replace 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.) Difference Keep Replace

Answer the following questions. 1. Douglas Computers makes 5,100 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. Peach Electronics offers to supply 5,100 units of CB76 for $260. If Douglas buys from Peach it will be able to save $20 per unit in fixed costs but continue to incur the remaining $70 per unit. Should Douglas accept Peach's offer? Explain. 2. RT Manufacturing is deciding whether to keep or replace an old machine. It obtains the following information: (Click the icon to view the information.) RT Manufacturing uses straight-line depreciation. Ignore the time value of money and income taxes. Should RT Manufacturing replace the old machine? Explain. Relevant LUSIS. Variable costs per unit Avoidable fixed costs per unit Purchase price per unit Unit relevant cost $ Total relevant costs 190 20 $ 210 $ 260 260 Douglas 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. RT Manufacturing is deciding whether to keep or replace an old machine. RT Manufacturing uses straight-line depreciation. Ignore the time value of money and income taxes. Should RT Manufacturing replace 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.) Difference Keep Replace

Managerial Accounting
Managerial Accounting
15th Edition
ISBN:9781337912020
Author:Carl Warren, Ph.d. Cma William B. Tayler
Publisher:Carl Warren, Ph.d. Cma William B. Tayler
Chapter11: Differential Analysis And Product Pricing
Section: Chapter Questions
Problem 2CMA
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I need help with requirement 2 please. 

Data table Old Machine New Machine $ 10,300 $ 10 years 6 years 4 years 6,180 4,120 2,300 0 16,500 Original cost Useful life Current age Remaining useful life Accumulated depreciation $ Book value $ Current disposal value (in cash) $ Terminal disposal value (4 years from now) $ Annual cash operating costs $ Print Done 8,800 4 years 0 years 4 years Not acquired yet Not acquired yet Not acquired yet $ 0 $ 15,500 - X
Transcribed Image Text:Data table Old Machine New Machine $ 10,300 $ 10 years 6 years 4 years 6,180 4,120 2,300 0 16,500 Original cost Useful life Current age Remaining useful life Accumulated depreciation $ Book value $ Current disposal value (in cash) $ Terminal disposal value (4 years from now) $ Annual cash operating costs $ Print Done 8,800 4 years 0 years 4 years Not acquired yet Not acquired yet Not acquired yet $ 0 $ 15,500 - X
Answer the following questions. 1. Douglas Computers makes 5,100 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. Peach Electronics offers to supply 5,100 units of CB76 for $260. If Douglas buys from Peach it will be able to save $20 per unit in fixed costs but continue to incur the remaining $70 per unit. Should Douglas accept Peach's offer? Explain. 2. RT Manufacturing is deciding whether to keep or replace an old machine. It obtains the following information: (Click the icon to view the information.) RT Manufacturing uses straight-line depreciation. Ignore the time value of money and income taxes. Should RT Manufacturing replace the old machine? Explain. Relevant CUSIS Variable costs per unit Avoidable fixed costs per unit Purchase price per unit Unit relevant cost $ Total relevant costs 190 20 $ $ 210 $ 260 260 C... Douglas 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. RT Manufacturing is deciding whether to keep or replace an old machine. RT Manufacturing uses straight-line depreciation. Ignore the time value of money and income taxes. Should RT Manufacturing replace 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.) Keep Replace Difference
Transcribed Image Text:Answer the following questions. 1. Douglas Computers makes 5,100 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. Peach Electronics offers to supply 5,100 units of CB76 for $260. If Douglas buys from Peach it will be able to save $20 per unit in fixed costs but continue to incur the remaining $70 per unit. Should Douglas accept Peach's offer? Explain. 2. RT Manufacturing is deciding whether to keep or replace an old machine. It obtains the following information: (Click the icon to view the information.) RT Manufacturing uses straight-line depreciation. Ignore the time value of money and income taxes. Should RT Manufacturing replace the old machine? Explain. Relevant CUSIS Variable costs per unit Avoidable fixed costs per unit Purchase price per unit Unit relevant cost $ Total relevant costs 190 20 $ $ 210 $ 260 260 C... Douglas 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. RT Manufacturing is deciding whether to keep or replace an old machine. RT Manufacturing uses straight-line depreciation. Ignore the time value of money and income taxes. Should RT Manufacturing replace 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.) Keep Replace Difference
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