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Answer the following questions. 1. Davanit Computers makes 5,600 units of a circuit board, CB76 at a cost of $200 each. Variable cost per unit is $160 and fixed cost per unit is $40. Peach Electronics offers to supply 5,600 units of CB76 for $180. If Davanit buys from Peach it will be able to save $15 per unit in fixed costs but continue to incur the remaining $25 per unit. Should Davanit accept Peach's offer? Explain. 2. LF Manufacturing is deciding whether to keep or replace an old machine. It obtains the following information: Click the icon to view the information.) LF Manufacturing uses straight-line depreciation. Ignore the time value of money and income taxes. Should LF Manufacturing replace the old machine? Explain. C. 1. Davanit Computers makes 5,600 units of a circuit board, CB76 at a cost of $200 each. Variable cost per unit is $160 and fixed cost per unit is $40. Peach Electronics offers to supply 5,600 units of CB76 for $180. If Davanit buys from Peach it will be able to save $15 per unit in fixed costs but continue to incur the remaining $25 per unit. Should Davanit accept Peach's offer? Explain. Begin by calculating the relevant cost per unit. (If an input field is not used in the table, leave the input field empty; do not enter a zero.) Make Buy Relevant costs: Unit relevant cost Peach's offer. When comparing relevant costs between the choices, Peach's offer price is than the cost to continue to Davanit Computers should produce. 2. LF Manufacturing is deciding whether to keep or replace an old machine. LF Manufacturing uses straight-line depreciation. Ignore the time value of money and income taxes. Should LF Manufacturing replace the old machine? Explain. Old Machine New Machine $ 8,200 10 years 3 years O years 3 years Original cost $ 10,900 Useful life Current age 7 years Remaining useful life Accumulated depreciation $ 7,630 Book value $ 3,270 Current disposal value (in cash) $ 2,700 Terminal disposal value (3 years from now) $ Annual cash operating costs $ 17,500 3 years Not acquired yet Not acquired yet Not acquired yet o 0 $ TA 14,500 2. LF Manufacturing is deciding whether to keep or replace an old machine. LF Manufacturing uses straight-line depreciation. Ignore the time value of money and income taxes. Should LF 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 Total relevant costs LF Manufacturing should the old machine. The cost to keep the machine is than the cost to replace the machine

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