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. PeachElectronics 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 theremaining $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. PeachElectronics 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 theremaining $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.)MakeBuyRelevant costs:Unit relevant costDouglas Computers shouldPeach's offer. When comparing relevant costs between the choices, Peach's offer price isthan the cost to continue toproduce.

Relevant Cost: Relevant cost is the avoidable cost which is incurred at the time of the decision…

Answered: CB76 at a cost of $220 each. Variable…

Business

Accounting

CB76 at a cost of $220 each. Variable cost If Douglas buys from Peach it will be able t ffer? Explain.

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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