A machine with a book value of $245,500 has an estimated 6-year life. A proposal is offered to sell the old machine for $214,500 and replace it with a new machine at a cost of $282,300. The new machine has a 6-year life with no residual value. The new machine would reduce annual direct labor costs from $50,900 to $40,700. Question Content Area Prepare a differential analysis dated October 3 on whether to Continue with Old Machine (Alternative 1)

A machine with a book value of $245,500 has an estimated 6-year life. A proposal is offered to sell the old machine for $214,500 and replace it with a new machine at a cost of $282,300. The new machine has a 6-year life with no residual value. The new machine would reduce annual direct labor costs from $50,900 to $40,700. Question Content Area Prepare a differential analysis dated October 3 on whether to Continue with Old Machine (Alternative 1)

Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter11: Differential Analysis And Product Pricing

Section: Chapter Questions

Problem 4BE: Replace equipment A machine with a book value of 80,000 has an estimated five-year life. A proposal...

See similar textbooks

Similar questions

Replace Equipment A machine with a book value of $250,700 has an estimated remaining life of 6 years. A proposal is offered to sell the old machine for $214,100 and replace it with a new machine at a cost of $283,500. The new machine has a 6-year life with no residual value. The new machine would reduce annual direct labor costs from $50,400 to $40,300. a. Prepare a differential analysis dated June 2 on whether to continue with the old machine (Alternative 1) or replace the old machine (Alternative 2). If an amount is zero, enter "0". If required, use a minus sign to indicate a loss. Differential Analysis Continue (Alt. 1) or Replace (Alt. 2) Old Machine June 2 Continue with Old Line Item Description Machine Replace Old Machine Differential Effects (Alternative 2) (Alternative 1) (Alternative 2) Proceeds from sale of old machine $ Revenues: Costs: Purchase price Direct labor (6 years) Profit (loss) A St St A B
Replace Equipment A machine with a book value of $245,400 has an estimated six-year life. A proposal is offered to sell the old machine for $214,100 and replace it with a new machine at a cost of $280,400. The new machine has a six-year life with no residual value. The new machine would reduce annual direct labor costs from $50,100 to $40,100. a. Prepare a differential analysis dated April 11 on whether to continue with the old machine (Alternative 1) or replace the old machine (Alternative 2). If an amount is zero, enter "0". If required, use a minus sign to indicate a loss. Differential Analysis Continue Old Machine (Alt. 1) or Replace Old Machine (Alt. 2) April 11 Continuewith OldMachine(Alternative 1) ReplaceOld Machine(Alternative 2) DifferentialEffects(Alternative 2) Revenues: Proceeds from sale of old machine $ $ $ Costs: Purchase price Direct labor (6 years) Profit (Loss) $ $ $ b. Should the company continue with the…
Replace Equipment A machine with a book value of $250,700 has an estimated remaining life of 6 years. A proposal is offered to sell the old machine for $214,100 and replace it with a new machine at a cost of $283,500. The new machine has a 6-year life with no residual value. The new machine would reduce annual direct labor costs from $50,400 to $40,300. a. Prepare a differential analysis dated June 2 on whether to continue with the old machine (Alternative 1) or replace the old machine (Alternative 2). If an amount is zero, enter "0". If required, use a minus sign to indicate a loss. Differential Analysis Continue (Alt. 1) or Replace (Alt. 2) Old Machine Line Item Description June 2 Continue with Old Machine Replace Old Differential Machine Effects (Alternative 2) (Alternative 1) (Alternative 2) Revenues: Proceeds from sale of old machine 0.00 $ 214,100 214,100 Costs: Purchase price Direct labor (6 years) Profit (loss) $ 0.00 -283,500 -283,500 302,400 241,800 60,600 -302,400 St 0 X B
Replace Equipment A machine with a book value of $247,100 has an estimated six-year life. A proposal is offered to sell the old machine for $216,800 and replace it with a new machine at a cost of $280,700. The new machine has a six-year life with no residual value. The new machine would reduce annual direct labor costs from $50,700 to $40,600. a. Prepare a differential analysis dated April 11 on whether to continue with the old machine (Alternative 1) or replace the old machine (Alternative 2). If an amount is zero, enter "0". Use a minus sign to indicate subtracted or negative numbers or a loss. Differential Analysis Continue with Old Machine (Alt. 1) or Replace Old Machine (Alt. 2) April 11 Continue with Old Machine (Alternative 1) Replace Old Machine (Alternative 2) Differential Effect on Income (Alternative 2) Revenues: Proceeds from sale of old machine $fill in the blank 1d230a036f95fc2_1 $fill in the blank 1d230a036f95fc2_2 $fill in the blank…
Replace Equipment A machine with a book value of $62,400 has an estimated 5-year life. A proposal is offered to sell the old machine for $39,400 and replace it with a new machine at a cost of $58,500. The new machine has a 5-year life with no residual value. The new machine would reduce annual direct labor costs from $8,700 to $5,900. Prepare a differential analysis dated April 11 on whether to Continue with Old Machine (Alternative 1) or Replace Old Machine (Alternative 2). If an amount is zero, enter "0". For those boxes in which you must enter subtracted or negative numbers use a minus sign. Differential Analysis Continue with Old Machine (Alt. 1) or Replace Old Machine (Alt. 2) April 11 Continue with Replace Old Differential Old Machine Machine Effect (Alternative 1) (Alternative 2) (Alternative 2) Revenues: Proceeds from sale of old machine $ $ $ Costs: Purchase price Direct labor (5 years) Profit (loss) $ $ $…
Replace Equipment A machine with a book value of $62,400 has an estimated 5-year life. A proposal is offered to sell the old machine for $39,400 and replace it with a new machine at a cost of $58,500. The new machine has a 5-year life with no residual value. The new machine would reduce annual direct labor costs from $8,700 to $5,900. Prepare a differential analysis dated April 11 on whether to Continue with Old Machine (Alternative 1) or Replace Old Machine (Alternative 2). If an amount is zero, enter "0". For those boxes in which you must enter subtracted or negative numbers use a minus sign. Differential Analysis Continue with Old Machine (Alt. 1) or Replace Old Machine (Alt. 2) April 11
Replace Equipment A machine with a book value of $250,900 has an estimated six-year life. A proposal is offered to sell the old machine for $217,500 and replace it with a new machine at a cost of $281,500. The new machine has a six-year life with no residual value. The new machine would reduce annual direct labor costs from $50,900 to $40,700. a. Prepare a differential analysis dated April 11 on whether to continue with the old machine (Alternative 1) or replace the old machine (Alternative 2). If an amount is zero, enter "0". If required, use a minus sign to indicate a loss. Differential Analysis Continue Old Machine (Alt. 1) or Replace old Machine (Alt. 2) April 11 Continue Replace Differential with Old Old Effects Machine Machine (Alternative 2) (Alternative 1) (Alternative 2) Revenues: Proceeds from sale of old machine Costs: Purchase price Direct labor (6 years) Profit (Loss) b. Should the company continue with the old machine (Alternative 1) or replace the old machine…
Replace Equipment A machine with a book value of $251,000 has an estimated six-year life. A proposal is offered to sell the old machine for $216,200 and replace it with a new machine at a cost of $283,00o. The new machine has a six-year life with no residual value. The new machine would reduce annual direct labor costs from $50,000 to $40,000. Prepare a differential analysis dated October 3 on whether to continue with the old machine (Alternative 1) or replace the old machine (Alternative 2). If an amount is zero, enter "O". For those boxes in which you must enter subtracted or negative numbers use a minus sign. Differential Analysis Continue with Old Machine (Alt. 1) or Replace Old Machine (Alt. 2) October 3 Differential Effect on Income (Alternative 2) Continue with Old Machine (Alternative 1) (Alternative 2) Replace Old Machine Revenues: Proceeds from sale of old machine Costs: Purchase price Direct labor (6 years) $ Continue with the old machine Replace the old machine with the old…
A machine with a book value of $250,800 has an estimated 6-year life. A proposal is offered to sell the old machine for $217,300 and replace it with a new machine at a cost of $284,000. The new machine has a 6-year life with no residual value. The new machine would reduce annual direct labor costs from $49,700 to $39,800. Prepare a differential analysis dated October 3 on whether to Continue with Old Machine (Alternative 1) or Replace Old Machine (Alternative 2). If an amount is zero, enter "0". For those boxes in which you must enter subtracted or negative numbers use a minus sign. Differential Analysis Continue with Old Machine (Alt. 1) or Replace Old Machine (Alt. 2) April 11 Continue with Replace Old Differential Old Machine Machine Effect (Alternative 1) (Alternative 2) (Alternative 2) Revenues: Proceeds from sale of old machine Costs: Purchase price Direct labor (6 years) Profit (loss) Should the company continue with the old machine (Alternative 1) or replace the old machine…
offered to sell the old machine for $50,500 and replace it with a new machine at a cost of $75,000. The new machine has a five-year life with no residual value. The new machine would reduce annual direct labor costs from $11,200 to $7,400. a. Prepare a differential analysis dated April 11 on whether to continue with the old machine (Alternative 1) or replace the old machine (Alternative 2). If an amount is zero, enter "0". If required, use a minus sign to indicate a loss. Differential Analysis Continue Old Machine (Alt. 1) or Replace Old Machine (Alt. 2) April 11 Continuewith OldMachine(Alternative 1) ReplaceOldMachine(Alternative 2) DifferentialEffects(Alternative 2) Revenues: Proceeds from sale of old machine $ $ $ Costs: Purchase price Direct labor (5 years) Profit (Loss) $ $ (Can you please explaine how you got this number) $ b. Should the company continue with the old machine (Alternative 1) or replace the old…
A machine with a book value of $250,000 has an estimated six-year life. A proposal is offered to sell the old machine for $320,000 and replace it with a new machine at a cost of $390,000. The new machine has a six-year life with no residual value. The new machine would reduce annual direct labor costs from $75,000 to $61,000. Prepare a differential analysis dated October 3 on whether to continue with the old machine or replace the old machine. Explain the results.
A machine with a book vale of $305,000 has an estimated 6-year life. A proposal is offered to sell the old machine for $390,000 and replace it with a new machine at a cost of $473,000. The new machine has a 6-year life with no residual value. The new machine would reduce annual direct labor costs from $91,000 to $74,000. Prepare a differential analysis dated October 3 on whether to Continue with Old Machine (Alternative 1) or Replace Old Machine (Alternative 2).