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butalik [34]
3 years ago
12

A machine with a book value of $80,000 has an estimated five-year life. A proposal is offered to sell the old machine for $50,50

0 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.
Prepare a differential analysis whether to continue with the old machine or place the old machine.
Business
1 answer:
tatuchka [14]3 years ago
6 0

Answer:

The company should continue with the old machine, because the company will lost $5,500 in 5 years with new machine.

Explanation:

Labor saving by using new machine in 5 years = 5* ($11,200 - $7,400) = $19,000

The cost for new machine = $75,000 for newly purchase  – sell old one for $50,500 = $24,500

So the total lost for new machine = cost of $24,500 – labor saving of $19,000 = $5,500

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Chicken and tuna fish are substitutes in consumption. Suppose that new technology decreases the cost of catching tuna. This woul
mihalych1998 [28]

Answer:

B. a decrease; a decrease

Explanation:

Substitutes' goods are products that can be consumed in place of each other.  If one product is missing, consumers will be ready and willing to buy its substitute. An increase or fall in the price of a good or services will cause the demand for its substitute to move in the opposite direction.

Equilibrium quantity is when supply matches the demand. If the price of Tuna fish decreases, its demand will increase as more customers will afford it. Tuna and chicken are substitutes, should the price of Tuna decrease,  customers will prefer to consume Tuna over chicken.  Consequently, the demand for chicken will reduce w leading to a decrease in its price.

6 0
3 years ago
Susan can brew 5 gallons of root beer in an hour or she can make 4 pizzas in an hour. Becky can brew 7 gallons of root beer in a
Murljashka [212]

Answer:

Becky

Explanation:

A person has absolute advantage in the production of a good if she produces more quantities of the good compared to the other person.

Susan produces 4 pizzas in an hour while Becky produces 5 pizzas in an hour. So, Becky has an absolute advantage in the production of pizzas.

I hope my answer helps you

6 0
3 years ago
You want to borrow $91,000 from your local bank to buy a new sailboat. You can afford to make monthly payments of $1,750, but no
mel-nik [20]

Answer:

5.784%

Explanation:

PV = $91000

PMT = -$1750

N = 60

FV = $0

<em>Using the financial calculator to solve for I/Y</em>

Interest yield = CPT I/Y(91000, -1750, 60, 0)

Interest yield = 0.00482

Interest yield = 0.482%

Highest rate APR = 0.482%*12

Highest rate APR = 5.784%

So, assuming monthly compounding, the highest rate i can afford on a 60-month APR loan is 5.784%.

3 0
3 years ago
A snack manufacturer discovers that they must increase the salt content of chips by 14 milligrams before about 50 percent of the
Wewaii [24]

Answer:

difference threshold

Explanation:

Difference threshold is use by businesses or effectively reduce cost without affecting their profit margin .

It is the minimum amount of change that is required to make consumers of a product to notice the change 50% of the time.

In the given scenario the snack manufacturer discovers that they must increase the salt content of chips by 14 milligrams before about 50 percent of their consumers notice the change.

7 0
3 years ago
he following information is available for Barnes Company for the fiscal year ended December 31: Beginning finished goods invento
IceJOKER [234]

Answer:

$210,000

Explanation:

For computing ending inventory under absorption costing, we need to first find out the units of ending inventory, and then do the proportion to each cost.

The units of ending inventory = Units produced - units sold

                                                 = 7,200 units - 5,200 units

                                                 = 2,000 units

Now,

The material cost = Material cost × (ending inventory units ÷ units produced)

                            = $144,000 × (2,000 ÷ 7,200)

                            = $40,000

The Variable conversion cost = Variable conversion cost × (ending inventory units ÷ units produced)

                                                 = $72,000 × (2,000 ÷ 7,200)

                                                 = $20,000

The Fixed manufacturing cost = Fixed manufacturing cost × (ending inventory units ÷ units produced)

                                                 = $540,000 × (2,000 ÷ 7,200)

                                                 = $150,000

So, the ending inventory equals to

= Material cost + Variable conversion cost + Fixed manufacturing cost

= $40,000 + $20,000 + $150,000

= $210,000

6 0
3 years ago
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