4. Taipei Company manufactures and sells product A. In 2019, it reported the following: | Units produced and sold | 3,200 | | --- | --- | | Investment | $2,400,000 | | Markup percentage on full cost | 8% | | Rate of return on investment | 12% | | Variable cost per unit | $500 | Required: (1) What was the full cost per unit? What was the selling price? (12%)

5. AB Company is considering replacement of its old machine with a new, more cost-saving one. Information related to the old and new machines follows: | Original cost---old machine | $60,000 | | --- | --- | | Book value---old machine | $50,000 | | Current market value---old machine | $42,000 | | Annual operating cost---old machine | $14,000 | | Purchase price---new machine | $75,000 | | Installation cost---new machine | $2,000 | | Annual operating cost---new machine | $6,000 | The old machine had been purchased a year ago. AB estimates that either machine has a remaining useful life of 5 years. At the end of 5 years, either machine would have a salvage value of zero. Ignore the effect of income taxes and the time value of money. Required: (1) Should AB purchase the new machine? Show your calculations. (10%)

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