(Ignore income taxes in this problem.) Blaine Corporation is considering replacing a technologically obsolete machine with a new
state-of-the-art numerically controlled machine. The new machine would cost $180,000 and would have a ten-year useful life. Unfortunately, the new machine would have no salvage value. The new machine would cost $12,000 per year to operate and maintain, but would save $48,000 per year in labor and other costs. The old machine can be sold now for scrap for $20,000. What is the simple rate of return on the new machine (round off your answer to the nearest one-hundredth of a percent)? Select one:
1) 10.00%2) 26.67%3) 22.50%4) 11.25%show work please
1) 10.00%2) 26.67%3) 22.50%4) 11.25%show work please
1 answer:
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Answer:
WA 1,682
LIFO 910
FIFO 2,260
Explanation:
We add the units purchase and the subtotal to get the total units available for sale.
Ending inventory physical units: 970 - 810 = 160 units
<u>Then, we calculate for each method:</u>
Weighted average:
cost of goods / available units = 10,190 / 970 = 10.51
160 units x 10.51 = 1,681.6
LIFO:
Ending inventory will be the oldest units:
160 units x 8 = 960
FIFO:
Ending inventory will be the newest units as the units are sold as soon as they come in
90 x 15 = 1,350
70 x 13 = 910
Total 2,260
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