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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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You speculate in crude oil futures. Last month, you purchased ten January futures contracts at a quoted price of 99.91. These co
shepuryov [24]

Answer:

Loss of $397,100

Explanation:

The price in future contract is $99.91 per barrel, and actual price is $60.20

The loss per barrel  = $99.91 - $60.20 = $39.71

Total loss = 10 contracts * 1000 barrels * loss of $39.71 per barrels =

= 10*1000*$39.71 = $397,100

5 0
3 years ago
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On May 1, 2016, Hecala Mining entered into an agreement with the state of New Mexico to obtain the rights to operate a mineral m
netineya [11]

Answer:

Explanation:

1. Mineral mine - $9.3 million

Development costs - $2500 000

1/[(1+0.07)^4]=0.76290

Restoration costs = $472995 = [(530k * 0.4)+(630k * 0.3)+($730k * 0.3)] *0.76290

Cost of mine= $9.3 million+$2500 000+$472995 = $12272995

2. Depletion:

($12272995/730000tons)*113000tons=$1899792

Depreciation of machinery=($143400-$12000)/730000 * 113000tons = $20340

Depreciation of structures=($36500/730000tons)*113000tons=$5650

3. Accrecion expense recognized:

$472995*0.07*8/12=$22073

4 0
3 years ago
What is the third rule to normalize a database?
Anastasy [175]

Answer:

If the first rule is observed, the database is said to be in "first normal form." If the first three rules are observed, the database is considered to be in "third normal form." Although other levels of normalization are possible, third normal form is considered the highest level.

8 0
2 years ago
Read 2 more answers
Woodmier Lawn Products introduced a new line of commercial sprinklers in 2020 that carry a one-year warranty against manufacture
blagie [28]

Answer:Woodmier journal $

1. Date

2021

Warranty expenses Dr 90,000

Warranty liability Cr. 90,000

Narration. Amount of warranty incurred for the year.

2021

Warranty liability Dr 90,000

Bank/Cash. Cr. 90,000

Narration. Payment of warranty expenditures.

2. No entry require

Explanation:

The warranty expenses since is a period of one year can be accounted for at the end of the year without requirements for provision at the beginning of the year. The actual warranty is debited to the income statement and the liability recognized as a creditor until payment.

The discontinuation of the sales of the product in 2021 will not affect the already incurred warranty liability and the account posting thereon in the following years.

8 0
3 years ago
If the production of a product or service involves external benefits, then the government can improve efficiency in the market b
gavmur [86]

Answer:

Providing a subsidy to correct for an underallocation of resources.

Explanation:

In Economics, subsidy can be defined as the amount of money or benefits such as tax reduction given by the government to sellers in order to sustain production and enable the buy to continuously purchase the product.

If the production of a product or service involves external benefits, then the government can improve efficiency in the market by providing a subsidy to correct for an underallocation of resources such as capital, land and labor used for production of these products.

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