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Ivenika [448]
3 years ago
12

Elmdale Company has a machine that affixes labels to bottles. The machine has a book value of $80,000 and a remaining useful lif

e of 3 years and no salvage value. A new, more efficient machine is available at a cost of $300,000 that will have a 5-year useful life with no salvage value. The new machine will lower annual variable production costs from $520,000 to $410,000. Prepare an analysis showing whether the old machine should be retained or replaced.
Business
1 answer:
AveGali [126]3 years ago
3 0

Answer and Explanation:

The preparation of the analysis  showing whether the old machine should be retained or replaced is presented below:

Particulars           Retained equipment       Replace equipment     Change in the net income

Variable cost        $1,560,000                 $1,230,000                $330,000

                  ($520,000 × 3 years)       ($410,000 × 3 years)

Cost of the new

machine                                                         $300,000                        -$300,000

Net change                                                                                               $30,000

As we can see the amount comes in positive which reflects that the machine should be replaced

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The fact that business people are expected not to harm customers, clients, and competitors knowingly through deception, mis-repr
tensa zangetsu [6.8K]

Answer: (D) Fairness and honesty

Explanation:

 The fairness and the honesty are the two main business ethics that helps in providing the various types of attributes such as integrity and the honesty with the customers regarding the products and the services.

These are the moral standard that helps in the decision making process by reducing the discrimination, mis-representation and also the coercion.

According to the given question, the business people are not providing any harm to the client, customers and also the competitors, this is the practicing of fairness and the honesty concept.

 Therefore, Option (D) is correct answer.

7 0
3 years ago
Resource Company acquired a tract of land containing an extractable natural resource. Cooper is required by the purchase contrac
maks197457 [2]
I think it is B. I’m sorry if I’m wrong.
7 0
3 years ago
To help finance a new plant, Roxxon, Inc. just sold a noncallable 40 year bond. This $1,000 par bond sells for $1,155 and has a
murzikaleks [220]

Answer:

4.96%

Explanation:

In order to determine the component after-tax cost of debt first we need to  compute the before tax cost of debt by applying the RATE formula which is to be shown in the attachment below:

Given that,  

Present value = $1,155

Future value or Face value = $1,000  

PMT = 1,000 × 8.25% ÷ 2 = $41.25

NPER = 40 years × 2 = 80 years

The formula is shown below:  

= Rate(NPER;PMT;-PV;FV;type)  

The present value come in negative  

So, after applying the above formula

1. The pretax cost of debt is 3.54%  × 2 = 7.08%

2. And, the after tax cost of debt would be

= Pretax cost of debt × ( 1 - tax rate)

= 7.08% × ( 1 - 0.30)

= 4.96%

8 0
3 years ago
Amount Number of units sold 11,000 Selling price per unit $ 16 Variable selling expense per unit $ 1 Variable administrative exp
german

Traditional income statement : Net operating income $47,000

Contribution income statement : Net operating income  $25,000

1.

Traditional Income Statement

Sales  (11,000 x $16)                       $176,000

Cost of goods sold

(9,000 + 87,000 - 25,000)            ($71,000)

Gross Margin                                  105,000

Selling and administrative expenses:  

Selling expense

(11,000 x 1) + 22,000                      $33,000

Administrative expense

(11,000 x 1) + 14,000                       $25000

Net operating income                  $47,000

2.

Contribution format income statement

Sales                                                $176,000

Variable expenses:  

Cost of goods sold        71,000  

Selling expense              11,000  

Administrative expense  11,000      ($93,000)

Contribution Margin                         $83,000

Fixed expenses:  

Selling expense                33,000  

Administrative expense   25,000     (58,000)

Net operating income                     $25,000

Learn more about preparation of income statement here : brainly.com/question/24498019

3 0
3 years ago
Effective SCM requires reducing cost, increasing inventory velocity and compressing cycle time. What of the following is true? 1
-Dominant- [34]

Answer:

The answer is: 4) More frequently than not, the three objectives are compatible.

Explanation:

Toyota is famous for its Just in Time (JIT) management. They are the absolute kings of efficient supply chain management and they were able to do it by making the three objectives compatible. That doesn't mean that they all have to be dealt with at the same time and with the same intensity.

Toyota's first goal was to reduce costs and in order to reduce costs they had to increase their inventory turnover. Then they discovered that in order to keep increasing inventory turnover, they had to compress their cycle time. When they were able to compress their cycle time, their turnover increased even more and their costs were lowered. The system produces continuous feedback and their efficiency keeps increasing.

I once visited one of their factories that produces almost 500 pickup trucks per day and every single work station had available inventory for only 4 trucks; only 4 engines, 16 doors, etc. It is amazing how they do it considering that every 3 minutes one truck is fully produced.

The three objectives are not only compatible, but they are absolutely necessary for the SCM to be effective.

7 0
3 years ago
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