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SVETLANKA909090 [29]
3 years ago
9

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.
Required:
Prepare an analysis showing whether the old machine should be retained or replaced.
Business
1 answer:
Aleks04 [339]3 years ago
4 0

Answer and Explanation:

The preparation of the analysis is shown below:

Particulars  Retained equipment Replace equipment Net income change

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

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

New machine cost                             $300,000                -$300,000

Net change                                                                   $30,000

So based on the analysis the old machine should be replaced

Therefore we considered all the information given in the question

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3 years ago
Transland Company has recently tried to improve its analysis for its manufacturing process. Units started into production equale
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Answer:

Materials cost per unit is $13.40

Explanation:

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6 0
4 years ago
Suppose a state has the following individual income tax structure.The first $20,000 that an individual earns is taxed at 5%. The
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Answer: $6,000

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7 0
4 years ago
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Answer:

E. The required standards of after-sales service for complex products are to be maintained.

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7 0
3 years ago
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