# BMGT 321 Chapter 11 Homework / hwaid.com

## BMGT 321 Chapter 11 Homework / hwaid.com

BMGT 321 Chapter 11 Homework / hwaid.com

http://hwaid.com/shop/bmgt-321-chapter-11-homework/

DECISION MAKING AND RELEVANT INFORMATION

11-16 Disposal of assets.

1. A company has an inventory of 1,250 assorted parts for a line of missiles that has been discontinued. The inventory cost is \$76,000. The parts can be either (a) remachined at total additional costs of \$26,500 and then sold for \$33,500 or (b) sold as scrap for \$2,500. Which action is more profitable? Show your calculations.
2. A truck, costing \$100,500 and uninsured, is wrecked its first day in use. It can be either (a) disposed of for \$18,000 cash and replaced with a similar truck costing \$103,000 or (b) rebuilt for \$88,500 and thus be brand-new as far as operating characteristics and looks are concerned. Which action is less costly? Show your calculations.

11-17 Relevant and irrelevant costs.

1. DeCesare Computers makes 5,200 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 5,200 units of CB76 for \$260. If DeCesare buys from Peach it will be able to save \$10 per unit in fixed costs but continue to incur the remaining \$80 per unit. Should DeCesare accept Peach’s offer? Explain.
2. LN Manufacturing is deciding whether to keep or replace an old machine. It obtains the following information:

LN Manufacturing uses straight-line depreciation. Ignore the time value of money and income taxes. Should LN Manufacturing replace the old machine? Explain.

11-18 Multiple choice.