Strategy, Balanced Scorecard, and Strategic Profitability Analysis
Relevant and irrelevant costs.
Use the blue shaded areas on the ENTERANSWERS tab for inputs.
Always use cell references and formulas where appropriate to receive full credit. If you copy/paste from the Instructions tab or if you type the numbers in, you will be marked wrong.
Requirements
1 Davanit Computers makes circuit boards. Review the information below for circuit board CB76.
Calculate the relevant cost per unit to continue making CB76 and the relevant cost per unit to purchase CB76. Should Davanit accept Peach's offer?
2 LF Manufacturing is deciding whether to keep or replace an old machine, It obtains the following information:
able[[ara,,,,],[,Old Machine,New Machine],[Original cost,$10,900,,$8,200,],[Useful life,10,years,3,years],[Current age,7,years,0,years],[Remaining useful life,3,years,3,years],[Accumulated depreciation,$7,630,,Not acquired yet],[Book value,$3,270,,Not acquired yet],[Current disposal value (in cash),$2,700,,Not acquired yet],[Terminal disposal value (5 years from now),$0,,$0,],[Annual cash operating costs,$17,500,,$14,500,]]
LF Manufacturing uses straight-line depreciation. Ignore the time value of money and income taxes. Calculate the total relevant costs to keep or replace the old machine. Should LF Manufacturing replace the old machine?
Calculate the relevant cost per unit to continue making CB76 and the relevant cost per unit to purchase CB76. Should Davanit accept Peach's offer?
(Always use cell references and formulas where appropriate to receive full credit. If you copy/paste from the Instructions tab or if you type the numbers in, you will be marked wrong.)
Calculate the total relevant costs to keep or replace the old machine. Should LF Manufacturing replace the old machine?
(Always use cell references and formulas where appropriate to receive full credit. If you copy/paste from the Instructions tab or if you type the numbers in, you will be marked wrong.)
Total relevant costs to keep the old machine
Total relevant costs to replace the old machine
Should RT Manufacturing replace the old machine?
able[[],[],[Yes]]
D 1.Calculate the relevant cost per unit to continue making CB76 and the relevant cost per unit to purchase CB76.Should Davanit accept Peach's offer? (Always use cell references and formulas where appropriate to receive full credit. If you copy/paste from the Instructions tab or if you type the numbers in,you will be marked wrong.)
E
Relevant cost per unit to continue making CB76 Relevant cost per unit to purchase CB76 Should Robinson accept Peach's offer?
Yes
2. Calculate the total relevant costs to keep or replace the old machine. Should LF Manufacturing replace the old machine? (Always use cell references and formulas where appropriate to receive full credit. If you copy/paste from the Instructions tab or if you type the numbers in, you will be marked wrong.)
Total relevant costs to keep the old machine Total relevant costs to replace the old machine Should RT Manufacturing replace the old machine?
Yes
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